US Debt put into perspective

[Dr. Love]

US Tax Revenue - $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 cuts - $38,500,000,000

Now, just remove 8 zeros and view it as a household budget.

Annual household income - $21,700
Annual Household spending - $38,200
New credit card debt - $16,500
Outstanding credit card balance - $142,710
Family budget cuts - $385

take it with a grain of salt, I found it on the internet, but it's still interesting (and a bit crazy/scary!)

[Seshmeister]

Using the same method spending on defence is $8 800. So with an income of $21 700 you are spending $8 800 on security.

[FORD]

I suppose the best way to continue with this analogy is to come up with household equivalents to the wasteful "credit card spending".

What would be the household equivalent of "useless wars that have nothing to do with the defense of the USA"?

Would "taking huge cash withdrawals from the credit card and handing the money out on the street corner in Beverly Hills" be the equivalent of "tax cuts for the tax dodging rich"?

[Dr. Love]

Well, it's only an analogy to reduce the numbers to "understandable" values/ratios... the US budget isn't really anything like a household budget.

[WACF]

Well, it's only an analogy to reduce the numbers to "understandable" values/ratios... the US budget isn't really anything like a household budget.

Really...it should scare the shit out of everyone.

You can not spend yourself out of debt...

[Seshmeister]

Of course you can.

It just depends on what you spend on.

[kwame k]

....

What would be the household equivalent of "useless wars that have nothing to do with the defense of the USA"?

Would "taking huge cash withdrawals from the credit card and handing the money out on the street corner in Beverly Hills" be the equivalent of "tax cuts for the tax dodging rich"?

Spending it on blow and hookers in Vegas seems a better analogy

[FORD]

Spending it on blow and hookers in Vegas seems a better analogy

Yeah, but at least that's fun, and when you gamble, there's always the slight chance that you come out with a profit.

[Seshmeister]

Almost all businesses when they start need to borrow money in order to make money. that's how capitalism works.

Governments should think the same and invest in stuff that generates wealth like science, infrastructure and education.

[knuckleboner]

Well, it's only an analogy to reduce the numbers to "understandable" values/ratios... the US budget isn't really anything like a household budget.

but if it was, that $142,000 in debt would be more analogous to a mortgage. not quite as crazy.

now, running yearly, growing deficits is bad. but otherwise, just like any mortgage, refinancing, home equity loan, the debt's not exactly a killer by itself...

[Dr. Love]

how many years in a row could you increase the amount of your mortgage before someone told you 'no'?

[Seshmeister]

but if it was, that $142,000 in debt would be more analogous to a mortgage. not quite as crazy.

I guess.

It used to be though that you could only get a mortgage of 3 times your income.

[binnie]

I guess.

It used to be though that you could only get a mortgage of 3 times your income.

It wouldn't be possible for the average first time buyer to do that now. The average UK wage is 24K. So, you could borrow 72K. That's not even a shed.

Even with two 'average' incomes it's only 144K. In most places, that's just not enough - the mortgage payments on it will also be crippling when interest rates start to go up (which they will).......

Right now, I'm thinking I'm going to need about a 30% deposit to avoid being abused by the bank for the rest of my life.

[Seshmeister]

It's nuts.

It was 3 to 3.5 times your income with a 10% deposit right up to 5 or 10 years ago.

Part of the reason the prices are so high is because everyone competed to take on more and more debt.

This may not go down too well but it's the same with women working full time when their families are very young. They have to do so they can pay high mortgages on family homes because women have worked full time when their families are very young pushing up the prices.

It's a spiral of misery.

Hey that would be a good name for one of your shouty bands...

[knuckleboner]

I guess.

It used to be though that you could only get a mortgage of 3 times your income.

with an established credit history like the U.S. (and yes, despite the debt, the credit history for borrowers has been outstanding), banks would be fighting hand over fist to lend them money.

in fact, they ARE. that's why despite everything, bond rates are so unbelievably low. regardless of what S&P says, the vast majority of bond buyers consider the U.S. to be a rock solid credit risk.


mind you, that's not a dick-cheney-debt-don't-mean-shit moment. things ARE far too out of balance for the long run. but the current position, by itself, is clearly not really damaging. it's the future trajectory that's the issue.