Tuesday, August 16, 2011

Why the Budget Compromise Is a Joke


President Obama and a few members of Congress praised the recent budget resolution (allowing the debt ceiling to be raised) as an important compromise that sets the stage for real change. Really? Let's look at the numbers.
U.S. income: $2,170,000,000,000
Federal budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers if we can convert them into terms that we can relate to. So let's remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family:
Total annual income for the Jones family: $21,700
Amount of money the Jones family spent: $38,200
Amount of new debt added to the credit card: $16,500
Outstanding balance on the credit card: $142,710
Amount cut from the budget: $385

In other words, Congress and the President refused to do the hard work of raising taxes or making actual cuts from things like defense, Social Security, Medicaid, and their own entitlement plans (lifetime income and health care after they leave office), and instead they cut a paltry 38.5 billion dollars from programs that help the poor and those in need.

Now you know.

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