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Federal Budget vs. Household Budget: How Do They Compare?

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  • Federal Budget vs. Household Budget: How Do They Compare?

    Zero-based budgeting is a method of budgeting where your income minus expenses equals zero. Follow these steps to make a zero-based budget each month.


    You can't borrow your way out of debt.

    Whenever the talking heads on TV start talking about the national economy, most of our eyes start to glaze over. The gigantic numbers that they throw out there are ridiculous; most Americans have no idea what those numbers mean in practical terms. So, I thought it’d be fun to turn those figures into something we can understand a little better—like a household budget.

    The federal government will take in $2.173 trillion in 2011. That’s their income, and it sounds pretty good. Until, that is, you factor in that the federal government will spend $3.818 trillion during the year. So, just like many families, the government’s outgo exceeds their income—to the tune of $1.645 trillion in overspending. That’s called the deficit. Altogether, the government has $14.2 trillion in debt.

    What would happen if John Q. Public and his wife called my show with these kinds of numbers? Here’s how their financial situation would stack up:

    If their household income was $55,000 per year, they’d actually be spending $96,500—$41,500 more than they made! That means they’re spending 175% of their annual income! So, in 2011 they’d add $41,500 of debt to their current credit card debt of $366,000!

    What’s the first step to get out of debt? Stop overspending! But that means a family that is used to spending $96,500 a year has to learn how to live on $55,000. That’s a tough pill to swallow. Those kinds of spending cuts seriously hurt, but it’s the only way out of debt for John Q. Public.

    If I ever got a call from a family that was spending $41,500 more than they made every year, you would definitely expect me to yell at them for their dumb behavior, right? Kids, no more McDonald’s four times a week. Snacks come from the grocery store now. And we’re not going to the movies for a while, so break out the board games and TV Guide. This family has a problem, so it’s time to amputate the lifestyle!

    It works the same way for the government. You can’t borrow your way out of debt, whether you’re a typical American family or the entire U.S. government. At some point, you’ve got to say, “Enough is enough!” and make the hard cuts necessary to win over the long haul.
    class joke
    {
    private:
    char Forrest, Jenny, Momma, LtDan;
    double Peas, Carrots;
    string MommaAlwaysSaid(const bool AddAnyTime = True)
    };

  • #2
    interesting comparison, easily shows how bad shape we are really in.
    first class white trash

    Comment


    • #3
      I have said that since day one and explained it that way to many friends who dont see eye to eye with me. Good read for sure!

      Comment


      • #4
        Need a talking head to relate that info (other than Dave).

        We're so screwed with the debt. Damn, I remember when it was just billions...
        "Self-government won't work without self-discipline." - Paul Harvey

        Comment


        • #5
          I believe Al P mentioned this before, but he's right. You can't really compare the gov't budget to that of a household. It's closer to a business.

          Comment


          • #6
            Originally posted by exlude View Post
            I believe Al P mentioned this before, but he's right. You can't really compare the gov't budget to that of a household. It's closer to a business.
            tdd has a 4.0 at uta.
            Originally posted by davbrucas
            I want to like Slow99 since people I know say he's a good guy, but just about everything he posts is condescending and passive aggressive.

            Most people I talk to have nothing but good things to say about you, but you sure come across as a condescending prick. Do you have an inferiority complex you've attempted to overcome through overachievement? Or were you fondled as a child?

            You and slow99 should date. You both have passive aggressiveness down pat.

            Comment


            • #7
              lmao oh noes

              Comment


              • #8
                Originally posted by exlude View Post
                I believe Al P mentioned this before, but he's right. You can't really compare the gov't budget to that of a household. It's closer to a business.
                So being running the budget like General Motor with mountains of debt will get us where?

                The problem is not how it is being compared but that most of the leaders are in denial that it is a problem. Like any other addiction, the addict just can't stop spending money they don't have.
                class joke
                {
                private:
                char Forrest, Jenny, Momma, LtDan;
                double Peas, Carrots;
                string MommaAlwaysSaid(const bool AddAnyTime = True)
                };

                Comment


                • #9
                  Originally posted by slow99 View Post
                  tdd has a 4.0 at uta.
                  Envy is not becoming.
                  class joke
                  {
                  private:
                  char Forrest, Jenny, Momma, LtDan;
                  double Peas, Carrots;
                  string MommaAlwaysSaid(const bool AddAnyTime = True)
                  };

                  Comment


                  • #10
                    Everyone is laughing and poking fun of how the Federal Government is handling its finances, but just wait until all these states bust on their pension funds... it's coming.

                    Fuel on the fire. Basically, we're done.

                    Raise taxes? Print more? Raise interest rates? Cut Spending?

                    Choose your poison. Even if you picked all of the above, you won't get ballpark to paying anything off, all you'll do is break the stressed backs of the people.

                    Comment


                    • #11
                      It just seems so SIMPLE. It does not matter what your politics, religion and so on - it's just very simple. We need budget cuts.
                      Originally posted by MR EDD
                      U defend him who use's racial slurs like hes drinking water.

                      Comment


                      • #12
                        Originally posted by Denny View Post
                        Everyone is laughing and poking fun of how the Federal Government is handling its finances, but just wait until all these states bust on their pension funds... it's coming.

                        Fuel on the fire. Basically, we're done.

                        Raise taxes? Print more? Raise interest rates? Cut Spending?

                        Choose your poison. Even if you picked all of the above, you won't get ballpark to paying anything off, all you'll do is break the stressed backs of the people.
                        I see what you're saying. Personally, I love my lifestyle and am doing good and it scares the shit out of me that the road to recovery may mean a hit to my workload - which may mean unemployment and or a huge loss in pay.

                        However, the road to the country's economic recovery has to start somewhere. Right?
                        Originally posted by MR EDD
                        U defend him who use's racial slurs like hes drinking water.

                        Comment


                        • #13
                          Originally posted by ceyko View Post
                          I see what you're saying. Personally, I love my lifestyle and am doing good and it scares the shit out of me that the road to recovery may mean a hit to my workload - which may mean unemployment and or a huge loss in pay.

                          However, the road to the country's economic recovery has to start somewhere. Right?
                          Right. The only starting point I see is a complete rest, since all other actions would seem to yeild results that don't outweigh our accumulating losses.

                          Comment


                          • #14
                            ...

                            Originally posted by exlude View Post
                            I believe Al P mentioned this before, but he's right. You can't really compare the gov't budget to that of a household. It's closer to a business.
                            Except, many business fail because they gamble too much with their finances. Can our country affford to fail and be sold to China?

                            Comment

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