Friday, April 8, 2011

Perspective, what congress is fighting over.

Right now we are on the verge of a "government shut down", which in reality is a partial government shut down as there are many departments that will be working at 80% or more of normal capacity. I was thinking about the number in my head and wanted to put out there the perspective of how much they are arguing over. To the best of my knowledge this years total budget is about 2.5 trillion dollars. One side wanted about 60 billion in cuts, while the other side wanted much less than that. They narrowed it down to about a 9 billion dollar difference. These numbers all seem so large that they are hard to comprehend but here is a way to make it more real to people. Let’s say they settle on 40 billion (the high end of where they are debating over right now).
2,500,000,000,000 is the total.
40,000,000,000 is the amount to be cut.
Cancel out all the zeros and you are left with 250 and 4. Divide 4 by 250 to get the percentage that would be cut. That is 0.016 or about 1.6%. If the average American were to have to cut 1.6% of their budget it would look something like this. 52,000 dollars a year. 52,000 times 0.016 (1.6%) is 832 dollars a year to cut from a personal budget to save 1.6% Divide that by 52 weeks and it comes to $16 dollars a week. That would be less than once a week skipping Burger King for a family of 4 and instead eating the left over meat loaf from the night before.
We all make these sacrifices in order to try to stay within a budget. If they make these cuts they will still be over a trillion dollars in debt this year. It is a drop in the bucket. A trillion dollars of debt per year is about 40% of the yearly budget for the USA. If a person making 52,000 a year were to carry the same level of debt each year they would go $20,000 dollars in dept per year. After three years they would have more debt than they make in a year. After five years they would have twice as much debt as they make in a year. Whether you are conservative or liberal at some point something has to give or all programs will be eliminated by default of not having any money to do anything but pay on the debt.

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