The Federal Budget Up Close and Personal!
Richard Brownstein
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: $142,710Amount cut from the budget: $385
So in effect last month Congress, or in this example the Jones family, sat down at the kitchen table and agreed to cut $385 from the annual budget. What family would cut $385 of spending in order to solve $16,500 in deficit spending?
It is a start, although hardly a solution.
Now after years of this, the Jones family has $142,710 of debt on its credit card (which is the equivalent of the national debt).
You would think the Jones family would recognize and address this situation, but it does not. Neither does Congress.
The root of the debt problem is that the voters typically do not send people to Congress to save money. They are sent there to bring home the bacon to their own home state! Pet projects.
To effect budget change, we need to change the job description and give Congress new marching orders.
It is awfully hard (but not impossible) to reverse course and tell the government to stop borrowing money from our children and spending it now.
In effect, what we have is a reverse mortgage on the country. The problem is that the voters have become addicted to the money. Moreover, the American voters are still in the denial stage, and do not want to face the possibility of going into rehab.
Plan Smart Retire Well Richard Brownstein, CFP® 75 Lane Road Fairfield, New Jersey 07004
August 20, 2011