A bit late, but I figure it’s better now than never…
The United States has huge debt. Surrounded by news of European countries needing bailouts and stimulus spending appearing to not do much good, the general public seems to be wanting austerity measures. So about about a month and a half ago Congress was presented with the issue of whether or not to raise the debt ceiling. The debt ceiling is theoretically in place to stop out of control spending. When Federal debt approaches the ceiling, Congress has a debate on the merits of whether or not to raise the ceiling, ideally based on the quality of the increased spending. Throughout most of history, this increase goes by without much debate. However, in a climate of growing popular support for fiscal austerity, it didn’t go by as easily this time.
Most Democrats in Congress think now is not the time to cut spending. We need more spending to stimulate the economy. Worry about jobs now, deficit later. Republicans, mostly from the urging of tea partiers, think austerity is important to prevent us from approaching default or spending irresponsibly. At the time, austerity measures were also thought to have prevented a downgrading from Moody’s (the budget deal that was eventually reached and raised the debt ceiling did not accomplish this goal).
But throughout all of that, I noticed all of the bickering was essentially useless. Partisan argument for the sake of giving an appearance of taking a stand for the unemployed (Democrats) or spending (Republicans). The two sides seemed on totally opposite sides of the spectrum. But how much were they really fighting over? Were the Republicans really trying to cut the government that dramatically? No, they weren’t. The deal that was reached featured insanely trivial cuts. Despite cries from Democrats that the budget deal reached compromised so much, the Illinois Policy Institute produced a very interesting analogy to show how small the cuts actually were.
Here’s a look at the projected numbers for fiscal year 2011.
- US Tax Revenue: $2,228,000,000,000
- Federal Budget: $3,708,000,000,000
- New Debt: $1,480,000,000,000
- National Debt: $14,584,000,000,000
- Recent Budget Cuts: $352,000,000
These numbers might be a little difficult to comprehend so understanding them from the lens of an everyday household might be a bit easier. By eliminating 8 zeroes just see how different the picture looks.
- Annual Family Income: $22,280
- Money the Family Spent: $37,080
- New Debt on the Credit Card: $14,800
- Outstanding Balance on Credit Card: $145,840
- Total Budget Cuts: $3.52