Comparing the Federal Budget to an Individual Taxpayer’s Home Budget

 

Comparing the Federal Budget to an Individual Taxpayer’s Home Budget

Recently I wrote about our U.S. economy, how far in debt we are and what it would take to dig ourselves out of debt. Yet until recently when some folks noticed how much we spend just on the annual interest on that debt did those folks become concerned.

So, to make this more understandable to people who don’t deal with political or financial terms, I’d like to make a household budget comparable to an individual’s personal household budget. So, let’s get started.

Total income for this individual is $63795. per year. Take home after taxes, Medicare, etc. $51904 per year.

Total calculated expenditures for the year $88172 (rent or mortgage, car, insurances, taxes, utilities, etc., oh, and interest on money that you’ve borrowed and not yet paid back (Total Loan $469385.98 Annual interest on loan without anything on the principle of the loan $15020)

So, basically what this is telling us is that we make $63795 ($51904 take home) this year but we’re going to spend $88172. That puts this individual $36268 further in debt.

Better get another loan*. So, next year you’ll be even further in debt. Soon no one will be willing to lend you any money. Actually, no one would have lent you money long before it reached near that much! But if multiplied proportionally to the annual income and debt of the U.S. government this is exactly the situation our government is in!!!

So, an individual would have two choices of what to do in this situation-

1. Increase income.

2. Decrease spending.

Well, believe it or not, these are the two options that our government has also.

So, how does the government do this.

1. Increase income- a. Tax your citizens more. Citizens are struggling enough without more taxes!

b. Grow the economy. Hey wait a minute. Isn’t this exactly what our president is trying to do? And a certain political party is trying to trip him up every step of the way. Do they care more about their party than the country? Do they hate our President so much that they want to sacrifice our country to make him fail?

2. Decrease spending- a. Decrease funding for all government funded programs by at least 20% in order to balance the budget. Eliminate programs if not absolutely necessary.

b. Eliminate waste and fraud. Hey wait a minute. Isn’t this exactly what our president is trying to do with DOGE? And a certain political party is trying to trip him up every step of the way. Do they hate our President so much that they want to sacrifice our country to make him fail?

The numbers in this article are not off the top of my head but are from published estimates.

*In government terminology “Better get another loan” equates “raise the debt ceiling”.