Million, Billion, Trillion. Sometimes it's difficult to comprehend such large numbers. Therefore, our national debt and our federal budget don't really seem real. A $38 billion cut might actually seem like a lot to a $3.8 trillion budget. 38 is bigger than 3.8, isn't it. It's difficult to do the mental math and keep the conversions correct in one's head when different units are used in the same discussion. I wanted to bring those big numbers down to everyday numbers so it's easier to comprehend.
First, here are some national budget numbers:
U.S. Tax revenue: $2,170,000,000,000
Fed budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000
Admit it. It's tough to see through all of those zeroes. So let's just remove 8 zeros and bring it down to terms of a family budget:
Annual family income: $21,700.
Money the family spent this year: $38,200.
New debt on the credit card this year: $16,500.
Outstanding balance on the credit card: $142,710
Total budget cuts: $385.
What sort of credit rating do you think you'd have in this situation?
Would you say to the banker, don't worry, I'm cutting out $32/month. That's about what my family of four spends when we go out to Chick-Fil-A for lunch. Oooh, the pain and agony.
What if my interest rate on the $142,710 loan , 2 year variable rate interest only, is currently at 2%? That gives me a interest payment of $2854. If it went up to a more normal rate of 6%, my interest only payment would triple to $8562, which is 40% of my income. How am I ever going to get to the point where I can actually begin paying off the actual loan amount?
Would it be wise to continue to give money to charities and go further into debt?
Would it be wise to continue to give money to some friends so that they continue to like me?
Would it be wise to promise my kids Christmas presents just like in the past?
Would it be wise to keep buying more bazookas to defend my home even though the criminals only have pistols?
Would it be cruel to my kids to bind them to this debt?
Is it fair to bind my grandchildren who aren't even born yet to this debt?