The U.S. Congress sets a federal budget every year in the trillions of dollars. Very few people can comprehend 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% of the budget)
It helps to think about these numbers in terms that we relate to. Let’s remove eight zeros from these numbers and pretend this is a household budget for the Jones family.
- Jones Family Total Annual Income: $21,700
- Jones Family Total Annual Spending: $38,200
- Jones Family New Credit Card Debt: $16,500
- Jones Family Credit Card Balance: $142,710
- Jones Family Annual Budget Cuts: $385
In effect, last month Congress (or in this example the Jones’), had a kitchen table family meeting and agreed to cut $385 from its annual budget. What family in their right mind would cut $385 to solve $16,500 in deficit spending?!? It is a start, although hardly a solution.
After years of this, the Jones family has $142,710 of credit card debt (the equivalent of the national debt). You’d hope the Jones family recognizes and addresses this situation, but they don’t. Neither does Congress. They simply move forward and function under $142k credit card debt and $21k annual income! Maybe it will just go away. Or maybe we can all kick the can and let the next generation pay for it…
To effect budget change, we need to change the job description of our representatives 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 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.
I hope you share these numbers (and real world analogy) with your clients. Awareness and acceptance are our first steps to a solution…