Let’s Put the Federal Debt into Perspective
Last year, in the midst of federal debt crisis, I observed in a client newsletter (Let’s Put the Federal Debt and Budget Crises in Perspective
) that as painful as the fractious debate over raising the nation’s debt ceiling was, that I hoped it would underscore for Americans that getting our nation’s fiscal house in order should be job one. Yet, although politicians on today’s primary campaign trails loudly address the need to reduce spending, each year our federal government continues to spend far more than it collects in tax revenues.
For many in Congress, I suspect the numbers on the federal balance sheet may be so big that they become meaningless. In my newsletter, I suggested stripping away zeroes to try and make it possible to relate to the numbers and take action to reduce spending. MFS Funds has gone one better and produced a chart (If your budget resembled the U.S. Government) that really puts the federal budget in perspective. For example, if you made $100,000 last year and ran your household like the federal government, you would have spent nearly $160,000 and would be shouldering an accumulated dent of almost $650,000, more than six times your current annual earnings. Take a look:
Thinking in terms of our own budgets illustrates the financial stress our nation operates under and underscores the need for spending and tax reform.
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