By James Schaefer
This snapshot of federal spending recently crossed my desk, and it is worth sharing. It simply converts the federal numbers into an equivalent household budget. The numbers are approximately correct for 2012, though they don’t have to match exactly to make the point.
Why the U.S. was downgraded:
• 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 cuts: $ 38,500,000,000
Let’s now remove 8 zeros and pretend it’s a household budget:
• Annual family income: $21,700
• Money the family spent: $38,200
• New debt on the credit card: $16,500
• Outstanding balance on the credit card: $142,710
• Total budget cuts: $385
The example is excellent as far as it goes, but alas, here is the kicker: America’s unfunded liabilities — the promises of future benefits to its citizens, using the citizens’ own money — are currently listed at $117.4 trillion dollars (see U.S. Debt Clock).
Once again, let’s remove eight zeroes and see what we get for the equivalent future burden on a household budget. You may want to be sitting down.
This is the household equivalent of the government’s unfunded liability largesse — promises of future spending on entitlements — and the burden it will impose on the children of a hypothetical family.
Nice gift to the kids, huh?
We’re doing exactly the same thing on a national level with entitlements, and we’re leaving an enormous burden to future, unborn generations.