Jim Thompson wrote:
US Budget for Dummies.... (from http://tinyurl.com/cv3wlwx )
* 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
Lets now remove 8 zeros and pretend its 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 so far: $38.50
So far, it makes sense. But, unlike a household budget, the government has a
few things they can do about the first line item: Annual family income.
They can increase it across the board. And risk finding the other side of
the Laffer curve. They can plug loopholes, increasing the revenue from a
few sources that are relatively insensitive to tax rates and keep rates low
for economic activity that might otherwise disappear or move offshore.
Unlike a family, there's not much flexibility with the second item. Dad
might tell the kids that they aren't getting new shoes this year. And we'll
be eating more macaroni and cheese and less filet mignon. Nobody is going
to vote dad out of office.
That $142,710 isn't like credit card debt. Part of it is, but part of it is
like a car load or a mortgage. And in that sense, a $142K mortgage isn't
completely out of line with the families income.
Oh yeah. There is something we can do about the revenue as well as the
outstanding debt balance. We can print money and inflate our way out of the
mess. That $142,710 is fixed. If we print enough to bring spending and
income together, we can just give the middle finger to the people holding
the outstanding debt. Sure, no one will ever loan money to us again. Big
deal, we just print more. The dollar tanks? Great! That just makes our
exports look cheaper around the rest of the world.
So, in the final analysis, its a lot more complex than your hosehold budget.
--
Paul Hovnanian
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Yesterday upon the stair,
I met a man who wasn't there.
He wasn't there again today.
I think he's with the CIA.
-- apologies to Hughes Mearns