I recently read a short article by John Stossel of Fox News regarding the enormity of the federal deficit. We’ve all heard news stories about the U.S. debt crisis but for most of us, me included, it’s hard to grasp the magnitude of the problem. So here goes:
Imagine that there’s a family that earns an income of $21,700 a year. But this family spends $38,200 a year. The annual difference between income and expenses of $16,500 is added to their credit card debt. This family has been spending more than it brings in for many years and currently the outstanding balance on their credit card is $152,000. The interest expense on their credit card alone now costs them $4,540 annually or about 21 percent of their total annual income.
The family finally recognizes they have a serious financial problem that cannot go on indefinitely so they sit down together to determine what they can do to balance their budget. After much consideration and wrangling between family members they proudly propose cutting $385 from their spending and declare their efforts a success! It makes no difference to them that a cut of $385 is a pittance of what they need to cut in order to balance their budget. A year later, to their surprise, they actually tally the numbers to discover they spent $362 more than the previous year.
We are them! If you add eight zeros behind each of the numbers identified above that is the situation the U.S. government now faces:
Future generations will look back at us and wonder, “What were they thinking? Where was the leadership needed to avoid this economic crisis?” And before you think I’m going to only lambast the Democrats for profligate spending think again. They may talk a good game but when it comes to spending the Republicans are just as bad as the Democrats! A pox upon both their parties! Together they have spent money like drunken sailors! I know of no politician today who is willing to sacrifice his incumbency to do the right thing. Because believe me when I say this: any politician that is successful in turning this around will be voted out of office in the next election (think the recall of the Wisconsin governor). He or she will be vilified for doing the right thing because those who are feeding at the government trough will not go away quietly. They cannot be reasoned with. They will fight to the death to keep getting their government benefits (think Greek riots).
It reminds me of the story of the fox and the scorpion. The scorpion asks the fox if he can hitch a ride on his back in order to get across the river. The fox says to the scorpion, “But if I carry you on my back what will prevent you from stinging me.” The scorpion replied, “Why would I sting you, we’d both drown.” So the fox says to the scorpion jump on. Half way across the river the scorpion fatally stings the fox. The fox says, “Why did you sting me, we are both going to die.” The scorpion says, “Because it’s in my character to sting you.” And they both drown.
Those who are selfishly gorging themselves on government benefits, whether it’s the retiree who is receiving Social Security checks that are 4 times what he’s paid into the Social Security system or whether its corporate welfare in the form of tax breaks for the multinational corporations and everyone in between, don’t care what they are doing to this country as long as they get their’s. They are the scorpion who kills their free ride not realizing if everyone acts like they do that we’re all going to sink in our country’s enormous debt.
Is anyone listening to me? Does anyone care?
Sources: Dangerous Debt by John Stossel, January 5, 2012; Interest Expense on the Debt Outstanding, treasurydirect.gov
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