It’s been awhile since Spellchek has posted on simplifying the federal budget so anyone can understand it, so it’s time for an update. It’s the drop 8 zeros method I’m referring to. By taking incomprehensible federal budget numbers and simply removing 8 zeros from the end, the resulting numbers compare to a standard household budget. It’s much easier to wrap your head around these numbers when you can see how they work in your own budget.
For example, the estimated FY2015 federal tax revenue is $3.249 trillion dollars. Over $3 trillion dollars is even beyond Monopoly money comparisons. However, lop off 8 zeros and we have $31,249. Easy to comprehend. Here are some numbers and how they would fit into our household budget comparison.
U.S. tax revenue $3,249,000,000,000
U.S. federal spending $3,688,000,000,000
U.S. deficit 2015 $438,900,000,000
U.S. debt $18,150,000,000,000
Contrast these numbers with our household budget
Your annual pay $32,490
What you spent $36,880
Over budget by $4,390
Total accumulated debt $181,500
Wow. You could direct every penny you earn toward your debt for over 5 1/2 years without ever spending a penny toward such luxuries as food, shelter, transportation, etc., except that still wouldn’t pay it off as interest is accumulating all the while.