Friday, August 19, 2011

My View- Understanding the U.S. Budget

When we hear the U.S. budget discussed, the mind often boggles at the the size of the numbers that are used. The sheer enormity of the budget makes it difficult to comprehend. To better to understand our situation, I would like to give you the following example about the recently completed budget deal:

2011 Federal Budget Deal

Federal Budget: $3,820,000,000,000 (3.82 Trillion)

Income: $2,170,000,000,000 (2.17 Trillion)

New Debt: $1,650,000,000,000 (1.65 Trillion)

Amount Cut: $38,500,000,000 (38.5 Billion) – about 1% of the total budget.

National Debt Total: $14,271,000,000,000 before this years budget.

Harry Reid is calling this a “historic amount“. The President said it is a “historic deal”. John Boehner simply said, “We've come to an agreement”.

Let’s put this in perspective. It helps me to think about these numbers in terms to which we can relate.

Let’s remove eight zeroes from those numbers and pretend this is a household budget for the fictitious Jones family.

Amount of money the Jones family spent this Year: $38,200

Total income for the Jones family this Year: $21,700

Amount of new debt added to the credit card this Year: $16,500

Outstanding balance on the credit card: $142,710

New outstanding balance on credit card: $159,210

So last week, the Jones family sat down at the kitchen table and agreed to cut $385 from their yearly budget.

So now you can see, in everyday terms we can all grasp, our budget situation. To say that our situation in this country is dire is an understatement. While Washington continues to dither, the situation we face continues to deteriorate.

The technical term for this is: "We are screwed!"

And that, my friends, is not my view, but it is reality.

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