We continually return to the commentary on the budget, because it’s something that shouldn’t come with the baggage of partisanship; however, because of career politicians, it is rife with partisanship.
Whether you like big government and big taxes to fund robust social infrastructure or you like small government with small taxes and limited infrastructure, most of us can agree that our national debt exceeding our GDP is not a positive step for America’s future. By the end of typing this essay, our national debt will be $14,287,457,000,000, and our GDP will be $14,760,705,000; you do the math*.
The US budget deals with unfathomably large numbers. A few of us will see a six figure salary in our lifetime, and even fewer will see seven figures, so a budget with 13 figures and a debt with 14 figures is mind boggling; however, when you break it down to house hold economics, it’s really not that hard to understand.
The National Debt in terms of a middle class family:
Your household income is $50,000 annually. That seems pretty good right? However, your annual expenditures are $88,000, and you have a total debt of $329,000; next year your debt will be $367,000. If your jaw just dropped, then you have now grasped the gravity of the budget crisis. If your jaw didn’t drop, it’s time to call Suze Orman or consult a credit counselor. Our term limit site will wait; seriously, close out your Web browser now. If you find the above numbers to be unacceptable, then remember if Congress were running your household, it would consider reducing expenditures by $890 as an acceptable plan to reduce your debt.
The National Debt in terms of a student or young professional: You earn $21,700. That seems pretty good right? However, your annual expenditures are $38,200, and you’ve somehow managed to accumulate $143,000 in debt; next year your debt will be $160,000. If your lower jaw just dropped, then you have now grasped the gravity of the budget crisis. If your lower jaw didn’t drop, you are probably related to the family above and should join them in credit counseling. Our term limit site will wait; seriously, close out your Web browser now. If you find the above numbers to be unacceptable, then remember if Congress were running your individual finances, it would consider reducing expenditures by $385 as an acceptable plan to reduce your debt.
The scenario for the student or young professional is eerily similar to the 2011 budget. Just add eight zeros. Federal revenue gained from taxes and other sources is $2,170,000,000,000($2.17 trillion.) Federal expenditures are $3,820,000,000,000 ($3.82 trillion.) The Federal debt is $14,287,457,000,000($14.29 Trillion.) Congress’s plan to reduce our debt? Reducing our expenditures by one fiftieth of our total revenue—a cut of $38,500,000,000($38.5 billion.)
Why has nothing been done about it? “Leaders” in Washington don’t want to gamble with their incumbency, so they gamble with our future. Whether you find yourself leaning left or right, both sides are to blame. Republicans are afraid to raise taxes to increase income, and Democrats are afraid to reduce spending on infrastructure. Both parties are guilty of earmarks, pet projects, and pandering to powerful lobbies This is not a discussion about liberal and conservative economic theory; both have merit, and unless you have a doctorate in economics, the debate should stop there.
The solution to the national problem is the same as the solution would be to the household problem. The only difference is the zeros and commas.
For the household debt, it means cutting back on EVERYTHING. The food budget is going to include a lot more beans and rice with a lot less steak and restaurants. Your ten year old will learn a big lesson on finance when allowance is slashed from $20 to $5, and the weeklong adventure on the coast is going to be a weekend at the grandparents with pirated copies of Baywatch. Cable and satellite get replaced with rabbit ears, books, and monopoly on Thursday night.
For the national debt, it means cutting back on EVERYTHING. That shiny new defense contract for the latest super jet gets cut. Grandma is going to have to take one for the team and have her Medicare reduced. I’m sorry vets; I know you’ve already served your country more than most, but BOHICA. Planned Parenthood, you are going to have to do a lot more preemptive counseling on responsibility and a lot less pill passing. Israel, the $3 billion we give you annually is going to get dropped to $2 billion for awhile. The list goes on, but the point is, when it comes time to reduce national debt, nothing is sacred, because if our country collapses under the burden of its own weight, none of the above will exist at all.
Our situation, while grim, doesn’t require a rocket scientist to fix. All Washington has to do is take its income of $2.2 trillion and limit its expenditures to that amount and no more. We have $2.2 trillion dollars—stretch it as far as you can, and that’s it, there is nothing more to spend. Increasing taxes may increase revenue, but until the government learns to live within its means, increased revenue is just compounding the problem.
As long as Joe Congressman is worried about the next election, he’s not worried about making the tough decisions necessary to get back on track, because that means reducing expenditures that directly benefit his constituents rather than the nation as a whole.
*estimates on US Debt and GDP are found at www.usdebtclock.org
Article by Steven Specht and Jeremy Bullard