I just read a piece from American Thinker about debating a liberal on spending. You can read it here. Basically it asks 4 questions to illustrate how bad our nation’s spending problem is. I’ve seen this type of expose before and the problem I have with them is the numbers are nearly incomprehensible. It’s Monopoly money. You can’t get your arms around it because it’s so much. I believe this causes it to lose its effect somewhat. You just kind of nod your head and say OK, we owe trillions, whatever.
So I thought I would add a twist to it and try to use numbers we can all relate to. I used an example of a person that makes a $40,000 annual salary and then just inserted the same percentages of spending and debt the Federal government has accrued into the equation. If you’re serious about quizzing somebody on these points, just give them the amounts or you’ll be there all day. The key numbers are the ones they can relate to their own income situation. It should help to show someone the folly in our debt situation and why it must stop right away and not be dealt with later.
2010 TOTAL FEDERAL SPENDING $3.6 TRILLION
2010 FEDERAL TAX REVENUE $2.4 TRILLION
2010 FEDERAL DEFICIT $1.2 TRILLION
CURRENT FEDERAL DEBT $14 TRILLION
2010 FEDERAL DEBT INTEREST $414 BILLION
@6% INTEREST IT WOULD BE $840 BILLION
@10% INTEREST IT WOULD BE $1.4 TRILLION
@20% INTEREST IT WOULD BE $2.8 TRILLION
IN 2015 THE PROJECTED FEDERAL DEBT WILL BE $20 TRILLION
THE 2015 FEDERAL DEBT INTEREST PROJECTION IS $600 BILLION
@6% INTEREST IT WOULD BE $1.2 TRILLION
@10% INTEREST IT WOULD BE $2 TRILLION
@20% INTEREST IT WOULD BE $4 TRILLION
Now let’s make that comparison with some numbers you can better relate to.
$40,000 ANNUAL SALARY
$60,000 ANNUAL SPENDING
$20,000 ANNUAL DEFICIT
$233,400 TOTAL DEBT
$7,000 ANNUAL INTEREST AT 3%
$14,000 ANNUAL INTEREST AT 6%
$23,400 ANNUAL INTEREST AT 10%
$46,800 ANNUAL INTEREST AT 20%
$333,400 TOTAL DEBT
$10,000 ANNUAL INTEREST AT 3%
$20,000 ANNUAL INTEREST AT 6%
$33,400 ANNUAL INTEREST AT 10%
$66,800 ANNUAL INTEREST AT 20%
So a guy making 40K is spending 60K a year and has amassed nearly a quarter-million in debt. Even with todays historically low-interest rates, you have to cough up a big, fat check once a year. If you’re only paying a 1% interest rate, you have to write a check for $2,334. Can you do it? Remember, you’ve already accounted for your entire $40k salary plus $20k more. And when inflation forces Bernanke to raise the rates, your interest payments will skyrocket and consume an ever greater portion of your wages.
It’s easy to see this is just nuts. You’re spending 50% more than you make. You have debt equal to nearly 6 years of every penny you earn. The interest payment already eats up a months take-home pay. It’s likely already too late for you to save yourself, bankruptcy is nearly assured.
What’s the last thing on your mind at this point? Could it be spending more money? You wouldn’t even consider it based on your finances. Yet, our government pays no heed to such inconveniences. Those are the benefits of not spending your own money, having access to a printing press and doing it in front of a public with little knowledge of what is really happening.
The only thing more amazing than the amount of our nation’s debt is the fact that we are even considering raising it. Any member of Congress who even considers it is exhibiting the height of irresponsibility. Yes, I know that includes a large amount of Republicans and even Conservatives. The fact is that there is only one reason we would need to raise it and that’s if we voluntarily exceed our budget with more spending. Simple, don’t spend more than you take in and the ceiling doesn’t need to be raised and the threats of impending doom vanish. Yet, many will buy into the scare tactics and vote for it.
This is the first true test for the GOP to see if they are serious about reducing spending. Sure, they’ll take a symbolic vote on repealing health care reform. The House will pass it and it likely won’t even come up for a vote in the Senate. If somehow it did and somehow it passed, Obama would veto it and you’ll never get the two-thirds to over-ride the veto. That’s all fine and dandy. Go ahead and get the members on record so it can be used for the 2012 election. But the fact is we need real reductions in spending just as we need real tax cuts. I will definitely remain a skeptic until proven wrong.