The Federal Budget in Household Figures

[Wonky Pundit]

This was an interesting exercise - up to a point - so I thought I'd share. In this example, Ramsey is equating the amount of revenue that the US Treasury takes in as equal to an income of $55,000 annually, then he scales everything else accordingly.

If their household income was $55,000 per year, they’d actually be spending $96,500—$41,500 more than they made! That means they’re spending 175% of their annual income! So, in 2011 they’d add $41,500 of debt to their current credit card debt of $366,000!

Federal Budget vs. Household Budget: How Do They Compare? - Budgeting - daveramsey.com

The problem is that Ramsey never mentions the one huge advantage Washington has that no household, no matter how rich, ever can have. Specifically, the government has a guaranteed revenue stream because of its tax collecting authority. Households can lose revenue by losing jobs at the drop of a hat, especially these days.

Is taxing authority enough to justify not worrying about the deficit? Of course not. In most situations, I'm opposed to the government spending more than it takes in, and that means that the current debt must be paid down going forward.

 

[Quantum Windbag]

This was an interesting exercise - up to a point - so I thought I'd share. In this example, Ramsey is equating the amount of revenue that the US Treasury takes in as equal to an income of $55,000 annually, then he scales everything else accordingly.

If their household income was $55,000 per year, they’d actually be spending $96,500—$41,500 more than they made! That means they’re spending 175% of their annual income! So, in 2011 they’d add $41,500 of debt to their current credit card debt of $366,000!

Federal Budget vs. Household Budget: How Do They Compare? - Budgeting - daveramsey.com

The problem is that Ramsey never mentions the one huge advantage Washington has that no household, no matter how rich, ever can have. Specifically, the government has a guaranteed revenue stream because of its tax collecting authority. Households can lose revenue by losing jobs at the drop of a hat, especially these days.

Is taxing authority enough to justify not worrying about the deficit? Of course not. In most situations, I'm opposed to the government spending more than it takes in, and that means that the current debt must be paid down going forward.

You are not smart enough to to be an idiot. I offer my sincere and heartfelt apologies to idiots everywhere for using that term to describe you.

Explain to me why, if the government has a guaranteed revenue stream, it wen down in 2009 despite taxes going up.