FEDERAL GOVERNMENTS SPENDING ADDICTION...

                                                              Federal Budget 101

Let's talk about the budget in non CPA speak.. Most Americans can't fathom trillions of dollars so we are going to make this simple and remove a carload of zero's from the discussion. Since I have been a real estate broker for a jillion years I'm going to equate the Federal Budget to a reverse mortgage.

·        A reverse mortgage is a form of a lifetime mortgage. The obligation to repay the loan is deferred to the heirs of the property. Which is exactly what the federal government is doing its spending addiction will leave future generations to repay the debt.

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in non CPA speak. Let's put the 2011 federal budget into a parameter that's understandable: The below number are from a reliable source but may not be exact. See U.S. Debt meter on American Freedom for exact deficit in real time.

·       U.S. income: $2,170,000,000,000

·       Federal budget: $3,820,000,000,000

·       New debt: $ 1,650,000,000,000

·       National debt: $14,271,000,000,000

·       Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to. Let's remove the carload of eight zeros from these numbers and pretend this is the household budget for the No Name family.

·       Total annual income for the No Name family: $21,700

·       Amount of money the No Name family spent: $38,200

·       Amount of new debt added to the credit card: $16,500

·       Outstanding balance on the credit card: $142,710

·       Amount cut from the budget: $385

So in effect last month Congress, or in this example the No Name family, sat down with the family  and agreed to cut $385 from its annual budget. What family would cut $385 of spending in order to solve $16,500 in deficit spending?

It's a start, but will hardly solve the problem of spending more than you earn.

Now after years of this, the  No Name family has $142,710 of debt on its credit card (which we will equate to the national debt).

It would seem logical  the Bo Name family would recognize and attempt to solve the situation, but it does not. Neither does Congress.

The root of the debt problem is that Washington is like a drug addict, they are addicted to spending other people's money. They need to be sent into rehab and re-educated on how to

oversee the welfare of the nation's economy.

To implement and effective policy for budget change, we need to change the job description and give Congress new marching orders. The new marching orders need to be CUT,CAP and BALANCE BUDGET. It's impossible to borrow or spend your way out of debt.

What Congress is doing is in effect a reverse mortgage on the country. The problem is that the voters have become addicted to the handouts. The 40 plus percent who do not contribute and expect the remaining taxpayer to keep supporting them. And the balance of American voters are still in the denial stage, and do not want to face the possibility of going into rehab.