Since our federal budget is so massive, we are usually always speaking in terms of millions, billions or trillions. Numbers too big to wrap your head around unless you reside on the Forbes 400 richie-rich list. So all we have to do is cut-off eight zeros from our statistics in order to step them down into a household budget level.
Our total national debt exceeds $16.6 trillion dollars. Convert it and you get $160,500 dollars for our household example.
Our national debt held by the public (excludes intra-governmental debt included above) is $11.8 trillion, or $118,000 dollars household.
Our national debt interest (based upon public debt) is accumulating at a rate of $454 billion for 2013. Convert and get $4,540 in the household budget.
Our federal spending for 2013 will exceed $3.5 trillion dollars. Convert and get $35,000 dollars for our household spending.
Our federal deficit for 2013 will likely exceed, but be at least $1 trillion dollars. Convert and get a $10,000 dollar shortfall in our household budget.
BTW, the sequestration spending reductions, or cuts as the left calls them? Even using the high projection of $85 billion translates into an $850 cut in our household budget. Use the CBO $44 billion number, cut in half as it is split between defense and discretionary spending, and you get a whopping $220 cut in our annual spending. Hardly earth-shattering as promoted by Obama.
You can easily see the problem come into focus now. In our household budget scenario, we’re spending $35 grand a year but only bringing in $25 grand giving us a yearly deficit of $10K. We’ve accumulated over $160 grand in debt and adding another $10K per year to that. Part of the $35K we’re spending each year is $4,540 toward debt service interest.
Can you imagine trying to solve your household budget issue? It’s still relatively easy right now as the Fed is keeping the interest rate artifically low. What (actually when) if the Fed has to raise rates at some point to combat inflation? We’ll stay out of the mud calculating debt service costs as the point here is to simplify. Suffice it to say that costs could easily double or triple or more in the future.
Our $4,540 debt service cost ballooning to $9,080 doubled or $13,620 at triple is going to be devastating to our household budget.
You don’t even have to be a low-information voter or a confused liberal that thinks we don’t have a spending problem to get confused by our federal budget. This should help make it much easier.