The Family Budget and the Federal Budget

I got one of those serial right-wing emails today from one of my low-information-voter acquaintances.  It went like this:

This rather brilliantly cuts thru all the political doublespeak we get. It puts it into a much better perspective.

  • U.S. Tax revenue: $2,170,000,000,000
  • Fed budget: $3,820,000,000,000
  • New debt: $ 1,650,000,000,000
  • National debt: $14,271,000,000,000
  • Recent budget cuts: $ 38,500,000,000

Let’s now remove 8 zeros and pretend it’s a household budget:

  • Annual family income: $21,700
  • Money the family spent: $38,200
  • New debt on the credit card: $16,500
  • Outstanding balance on the credit card: $142,710
  • Total budget cuts: $385

Got It ?????

The intent, clearly, is to lead the average American Idol fan to the conclusion that our deficit is caused by congressional reluctance to adequately trim “fat” from the budget.  I was incensed, of course, but quickly realized that the REAL problem could be brought to light simply by extending this analogy.  So I replied like this:

So, the family has a budget of $38,200 (after taxes, let’s assume) and debt of $142,000.   You can find a breakdown of 2011 federal spending HERE and a model of how the average American family spends its money HERE.  Matching the family expenses along the same lines as the government, the family will spend its annual budget roughly like this:
Housing & food (roughly 49% of household spending):                                     $18,700
These roughly equate to Medicare, Medicaid, Social Security & interest on the debt, which compromise 49% of federal spending and all, like housing & food, are basically unavoidable.
Healthcare, insurance & pensions (roughly 31% of household budgets)          $11,900
These roughly equate to federal discretionary and non-entitlement mandatory spending, which make up 31% of federal budget.  It’s basic O&M, cutting it is doable, but seriously short-sighted and unwise.
Clothing, entertainment and everything else (20% of household budgets)       $7,600
Roughly equates to Defense, 20% of federal budget.  There is some room for cutting, but even cutting it ALL won’t fix the problem and would be kind of like walking around naked and with no shoes.
So, the family takes in $21,700 and spends $38,200 annually.  What are you going to cut from that family budget so you can cover its needs AND pay down that debt, Einstein?  Answer: You’re not.  You can’t.  It simply costs too much to properly house, feed and provide for the family to solve the problem simply by cutting spending.  You’re going to have to get some of the people in that house who are not pulling their weight to contribute to the family income.  It’s the same problem we have as a country.
Okay, you say, let’s cut Medicaid.  After all, that’s just welfare for people who can’t afford to pay for their own medical expenses, right?  Fine.  If this hypothetical family was apportioned by age the same as the U.S. population, there would be two adults aged 30-54, two children aged 15-23, one child under 14 and one adult over 65.  Most Medicaid goes to poor children, nursing home care and people on life support.  Cutting it would be like deciding not to spend money on the youngest kid’s insulin treatments, unplugging the life support of one of the adults or throwing grandma out into the street.  Pick one.

The 1% and its apologists are fond of making this a choice between freeloaders and hard working people.  It’s not.  It’s a choice between really RICH people and the rest of us.  It’s a choice between greed and need.  Pick a side.  But be careful.  Someday you might be the one who needs insulin treatments, nursing home care, life support or be the grandma or grandpa who kicks kicked to the curb.  Your choice.