Wednesday, February 16, 2011

What to get freaked out about the size our debt?

Then you need to check this out.

Here's the video:

Here's some interesting facts:

We do not have a good frame of reference to understand the concept of a trillion. Professor Davies shared the following analogy to provide a frame of reference we can understand.

If the Federal government were scaled down to the size of the average US household, here’s what its finances would look like:

The Federal government would earn $50,000 a year in tax revenue (the same as the average US household).

It would be $325,000 in debt.
It would pay almost $10,000 a year in interest on that debt.
Last year, it would have spent $79,000.
This year, it is hoping to spend $86,000.
The $100 billion in spending cuts (that some politicians view as draconian) would be equivalent to the household cutting its $86,000 in planned spending down to a mere $83,700.
Not a bad start, but the household has another $33,700 to go before it balances its budget.

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