Government needs to stick to a budget
The United States is broke. Let’s figure out how broke by comparing the federal government’s finances to your neighbor Bill’s finances.
The federal budget, the amount the government will spend this year, is $2.5 trillion, give or take a few billion. The federal government will spend $1 trillion more this year than it “earns” from taxes. That $1 trillion is the federal deficit. If you add up all the deficits over the years, you get the debt. The federal debt is around $16 trillion, or 16 times the deficit. Much of the debt will be passed to our children after we are gone.
Now, let’s shrink these numbers proportionally to the size of a family budget. Suppose Bill has the same spending habits as the federal government. Bill has a budget of $100,000. That’s how much he will spend this year. Unfortunately, he only earns $60,000. Do you see a problem already? Bill’s deficit is $40,000. So, Bill must borrow the $40,000 from his credit cards each year. He has been doing this for so long he now has $640,000 in credit card debt (16 times his deficit). In addition, when Bill dies, he plans to pass his debt along to his children because he cleverly applied for the credit cards in their names.
Would you trust Bill with your finances? Of course, you wouldn’t. He is the most financially irresponsible person you know. Yet Bill has the same unsustainable financial practices as our elected leaders in Washington.