Family Finance – The U.S. Debt Problem

The U.S. National Debt, prior to the Fiscal Cliff late last year, was something like $14,271,000,000,000. There was plenty of talk surrounding what should be done, who should pay and what governmental programs should be cut so that President Obama could shave some zeros off the end of that number. Unfortunately, cutting programs and making budget adjustments won’t do enough to ease pressure on the total national debt.

The numbers being thrown around are beyond comprehension for most of us. Luckily for you and me, I stumbled upon a great way to help make sense of all this fiscal nonsense.

U.S. Tax Revenue $2,170,000,000,000
Federal Budget $3,820,000,000,000
New Debt $1,650,000,000,000
Cumulative Debt $14,271,000,000,000
Budget Cuts $38,500,000,000

All very exciting. By taking eight zeros off the end of each figure, imagine that the U.S. Government is your average American household. All of a sudden, the impact of the changes being made by the government becomes clear.

Family Income $21,700
Money spent $38,200
New credit debt $16,500
Outstanding debt $142,710
Budget cuts $38.50

So, the U.S. Government is an average American family that is over $140,000 in debt. In order to alleviate the debt, they are reducing their spending by $38 a year. At this rate, it will only take the U.S. Government 3,706 years to get out of debt.

When politicians throw around astronomical numbers we become desensitized to what they really mean. At a quick glance, this average family is in real financial trouble. They will struggle to obtain any form of financing with their debt ratio and will likely be forced into bankruptcy.

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