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”.

Why the United States doesn’t need Socialism- a different approach

Why the United States doesn’t need Socialism- a different approach

I could begin this paper writing about how socialism has never worked, how it drifts back to capitalism or worse to dictatorship. That’s it’s basically an outdated failed experiment.

BUT…

That’s not the basic reason that the United States doesn’t need socialism.

The United States, fundamentally, is a representative democracy by the people and for the people (sounds almost socialistic!).

Unions began here in the 1700s. Though unions had a rocky start, they have since become powerful representatives for the working class.

In the early 1900’s, our elected representatives began enacting labor laws to protect our working class from overzealous employers.

In 1938, a minimum wage was established.

As recently as the 1980’s, IRA’s and 401K’s were established that were not dependent on the survival of an employer’s business. These IRA’s and 401k’s today are heavily invested in the U.S. stock market. So, one of the primary goals of socialism, workers’ ownership of businesses, has been attained without socialism.

My message to progressives with socialistic leaning-

Please try working within this government, by the people and for the people, a government that allows you to pursue your dreams. Don’t expect things to be handed to you. WORK is the operative word. Success requires intelligence, work, ability to get along with others, and a dedicated effort (more work) everyday (except your day of rest).

My question for this day... 8-2-22

In the new testament, James 1:8 tells us that a “double-minded man is unstable in all his ways.”

Webster defines it this way. “DOUBLE-MINDED is wavering in mind : undecided, vacillating”

My question for this day..

Is a politician who claims to be Christian yet takes non Christian stands on issues double-minded?

SUPPLY AND DEMAND THEORY AND GAS PRICES TODAY 7-4-2022

Two take aways from the supply and demand theory.

If supply increases and demand stays the same- price decreases

If supply decreases and demand stays the same- price increases

So, let's look at the price of fossil fuel using the supply and demand theory.

Specifically, let's look at the price of gasoline at the pump, although fossil fuel has many more uses than gasoline.(1)

Gasoline pump prices at the end of 2020 were roughly $2.00 per gallon.

Gasoline pump prices in early February 2021 were roughly $3.20 per gallon (and were continuing to trend upward).

What changed?

Before Joe Biden became president, he promised to shut down the Keystone pipeline on Day 1 of his administration. He kept this promise. His administration also tightened the screws on all further fossil fuel exploration.

This started well before Putin invaded Ukraine.

Demand had not significantly increased.

Artificially decreasing supply of fossil fuel by shutting down major portions of the fossil fuel industry was and continues to be the overriding cause of the sky rocketing price of gasoline.

AND...

The exorbitant cost of gasoline is the overriding reason for the recession that we currently are experiencing.

Choking off the lifeline of the American economy is wrecking our economy. We may well find ourselves in a full fledged economic crash and an actual depression far worse than a recession! A depression can have much worse consequences globally leading to world wide conflicts worse than we are currently experiencing.

Do we need to move away from fossil fuels? YES.

However, two key elements are needed.

1. Better technology. Right now we lack the ability to replace fossil fuel with acceptable replacements. Wind and solar are NOT sufficient to support our current infrastructure. Add electric cars to this and we'd need wind mills and solar panels on every corner- literally! Imagine driving through our country and never losing sight of wind mills and solar panels in the cities, deserts, near ocean shores (in the water), mountain tops, great plains, National Parks, Washington State to Washington D.C., Hawaii to Alaska.

2. Patience. Phasing out fossil fuel and phasing in replacements (not necessarily wind mills and solar panels) takes time. How much time we have- I don't know.

(1) Fossil Fuel is not just gasoline. It's oil and grease to lubricate our cars, boats, jets, heat and air conditioning systems in your homes, machinery in factories, even your bicycle. It's also an ingredient in rubber and plastic products. From the time raw materials are taken from the ground purified, mixed with other materials, shaped into useable parts to the time they are put into use such as this computer I'm typing on, fossil fuels are required. Artificially decreasing the availability of this resource WITHOUT an acceptable alternative is an assault not just on oil companies but our entire economy, on our very lives!

Value of the American Dollar (part 2)- What is the Effect of printing dollars without creating anything of value?

The right way- Well, let's say a new beneficial drug is created and produced. The creators benefit. The new drug requires ingredients. Suppliers of the ingredients benefit. 

Truckers have to move the ingredients to the drug factory. The trucking industry benefits as do the truck building industry and the diesel producing industry. 

Pharmaceutical scientists' learn how to produce the drug. Their education and value increases. 

New workers are needed to produce the drug. Our work force benefits. 

Truckers have to move the new drug to the pharmacies. The trucking industry benefits as do the truck building industry and the diesel producing industry, a second time. 

A doctor has a new medicine to help his patients, his/her business increases. 

Retail employees have another product to sell making their jobs more valuable and secure. They and their company benefit. 

The consumer has to drive to pick up the drug. The automobile and gasoline industry benefit. 

The consumer's health improves and he/she again become contributing members of society. Society benefits. 

As you can see, not just the pharmaceutical company's position is improved but other businesses, all of which make up a portion of the economy, improve too. This is an example of how one thing lifts up many other sectors of the economy. This increases the actual wealth of the United States' economy and if no additional dollars are put into circulation, each dollar is a bit more valuable. 

The wrong way- Now let's look at what happens when the tail wags the dog! More dollars are put into circulation without any increase in the economy (no new products, no new gold, no increased education, etc.). 

 Okay, time for an extreme and exaggerated example. Say an ounce of gold is worth 100 dollars. So each dollar is worth 1/100 of an ounce. Next day the amount of dollars in circulation doubles. That means that each dollar is now only 1/200 of that ounce of gold! So, your dollar is only worth ½ as much. 

Our Government giving money away whether to all citizens, irresponsible borrowers, illegal aliens, or foreign governments creates no value. This devalues our economy and our dollars. Although giving money away is advertised as a stimulus for those receiving the money, the stimulus effect only lasts a short time then results in increased inflation a few months later. (Kinda like getting drunk to solve your problems- works until the next morning when all your problems are still there and you're hung over.) 

A better way- Make loans with interest to foreign governments (like China does). Modify how we treat illegal aliens. (Insure they are productive naturalized citizens before allowing them to join our society.) Make government benefits earned (anyone remember CETA? Or WPA?). “If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime.” 

                                                                    ___________ 

 Okay, I admit that choosing the pharmaceutical companies was a bad idea. I find them charging U.S. Citizens ten times what they charge citizens of other countries is disgraceful as is the entire financial side of the medical industry (10 different prices for the same

 procedure is wrong!).

The Value of the American Dollar. (part 1)

The wealth of the U.S. is based on the gold in Fort Knox, the natural resources we have, the land we own, the businesses we own, the homes we own, the cars and boats we own, medicines, even computers and TV sets we own as well as more abstract things like the education level of our citizens, the values we hold, the faith that others around the world have in the stability of our government and our free market system that allows any one of our citizens to excel in the field they choose and possibly get rich with their ideas and inventions. These all put together are called the economy. 

These are some of the things which create the value of a dollar. Intrinsically, a dollar bill's value is just ink and the paper it's printed on. It is the fact that it represents the extrinsic value of all those things mentioned above that gives it it's value.

Border Crisis 2021 Updated 2022

 There ain't no border crisis if you want open borders...

Do you think that nothing is being done by the White House is an oversight? 

The problem was created in Washington DC. 

The result is a disaster at our southern border.

I am not without sympathy for these illegal immigrants.

We need to make this situation a win for the immigrants and a win for the USA.

Make agreements with Mexico and Canada to accept some of people.

Use the money we currently give away to build border cities where these immigrants can learn to become productive citizens. They need to learn a salable skill and become naturalized citizens while working in these cities before being allowed to enter societies. This will demonstrate their true desire to become productive members of countries.

The immigrants who are unable to learn need to remain in these cities and become permanent residents doing jobs needed for these cities. 

Immigrants able but not willing to learn or work and those who continue to try to enter our countries illegally need to be deported back to their country of origin along with those who engage in illegal activity.

                                                                   UPDATE 2022

No update needed!

Here is a comment though.

The Number One responsibility of the National Government is to protect our citizens. It's the Executive Branch's responsibility to enforce the law's of our country.

Allowing and even encouraging(1) illegal aliens to enter our country is inviting terrorism to enter our country.

In my opinion- Allowing this to go on is at least a gross neglect of duty by our Executive Branch rising to the level of an impeachable offense! But then look who we'd have waiting in the wings...talk about jumping from the frying pan into the fire!

(1) Once again, in my opinion, providing and helping illegal aliens (free busing to U.S. cities, free care packages including monetary aid packages) equates to aiding and abetting fugitives of the law. I guess maybe they don't become fugitives until they don't show up for their court dates...