I was curious what the real impact of our budget and the proposed cuts would have, so I did a little mathery:


If the US government was a family making $100k a year:


1. It would have $402k in unsecured debt (credit cards, not auto loans or mortgages)
2. It would go $42k more in debt by the end of the year - $3,500 a month .
3. The budget cuts it is proposing would amount to $1,446 or $120 a month

$120 a month is the equivalent of not ordering a starbucks latte every day or turning off cable.

Somebody call Suzie Orman on the US.

Your analogy cannot provide a complete picture, though: consider the fact that the government is, ideally, an extension of the people, who, collectively, have more than enough money to pay off the debt.

Assuming paying off the debt is even a reasonable thing to do. It isn't. Don't try to 'compress' macroeconomics to every day sizes, by the way. It is dramatically misleading.

The US government isn't a family. Families aren't charged by others to provide some degree of services for a whole population, can't mint their own currency, don't have to deal with infrastructure issues, aren't made up of members who change every couple of years by popular opinion, and on and on and on. The numbers are scary if you condense them down to a family. But just about every factor is different between the two, so scaring is about the only useful application of that condensation.

Assuming paying off the debt is even a reasonable thing to do. It isn't. Don't try to 'compress' macroeconomics to every day sizes, by the way. It is dramatically misleading.

Huh? Family or no, I would think not having $14 trillion in debt is a good thing. I know that our current economic system is based on "having debt", but not that much debt. What did i miss here?


Sidenote: why is your Reputation so low???

perhaps people will find this to be a better analogy?

I was curious what the real impact of our budget and the proposed cuts would have, so I did a little mathery:

If the US government was a family making $100k a year:

1. It would have $402k in unsecured debt (credit cards, not auto loans or mortgages)
2. It would go $42k more in debt by the end of the year - $3,500 a month .
3. The budget cuts it is proposing would amount to $1,446 or $120 a month

$120 a month is the equivalent of not ordering a starbucks latte every day or turning off cable.

About the only similarity between a family budget and the US federal budget is that both involve money.





The economics are more similar to those of a multinational company, but still quite different in scope and function.

Consider that the largest public corporation by revenue is WalMart, in 2010 coming in at $258B. It is highly complex and simultaneously simple; the way it works in studied in economics classes around the globe.

The US Government is currently $3.7T, and it is also studied by economists around the globe. It is far more complex in its scope, and simultaneously in many ways is more simple than the biggest global corporations.


Comparing it to a family budget shows a lack of understanding of the economics involved.

I am from Switzerland and I never understood why the US is having so much fun making debt. I can only end badly in one big crash!

The US dollar is the old maid or "Black Pete". If it crashes, it will surely just be you and me that suffer, whereas the bankers and the "elite" will have a field day, with their gold, land and possesions safely locked away. The promise from the winners of the game, is that America will very quickly regain it's economic potential, perhaps with a new stronger economy, the Amero?

Another analogy could be the hungry little caterpillar, that has eaten all the leaves on the golden apple tree, and all it's cousins are starving, because the hungry little caterpillar was very hungry and not very little and kind of bossy. But the hungry little caterpillar didn't care much for that: "I'm gonna be a real pretty butterfly some day soon!", it said drowsily, as it spun the last few threads of golden silk, and closed off it's cocoon.

I am from Switzerland and I never understood why the US is having so much fun making debt. I can only end badly in one big crash!

Because it's free money you're never going to give back. When it comes the time to pay back some debt, you just ask that money from someone else and many times you might end paying a lot less that you should. Ultimately, the ones who end up losing are the debt share holders.