Monthly Archives: August 2011
The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let’s put the 2011 federal budget into perspective:
· 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 in terms that we can relate to. 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
Credit: DAVID THOMAS
Chief Executive Officer
Equitas Capital Advisors LLC
August 2nd 2011 just became a significant day in U.S. history. The day that the U.S. Congress and the President decided to make a hard deadline for coming to an agreement on a spending bill.
Unfortunately I fear that this will be more business as usual in Washington.
We failed to see any type of balanced budget amendment. However, it seems good that any increases in the debt ceiling are now linked to similar spending cuts.
The problem is that they created a significant loophole for the President to increase the debt ceiling without Congress approval if they fail to come to a compromise on a budget by the end of next year.
As I said before in Will The U.S. Ever Pay Off Its Debt, I fear that the U.S. will keep increasing the size of their debt hoping that inflation will help to mitigate some of the downside of that debt.
And we will all be poorer because of it. Especially the poor and middle class, but nearly everyone will suffer from it in the future.
Here’s to hoping we get our strategic finances figured out, and position ourselves for a better future…