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$7 billion just isn’t what it used to be.

In your budget, are your expenses less than your income?  Congratulations, you are a better budgeter than the US government.  Give yourself a round of applause.  

Stop clapping, you look crazy. 

The other day I had a good laugh when I came across this article from USA Today; the title reads: House approves $7 billion budget cut.  In terms of the US budget, $7 billion just doesn’t seem newsworthy.  This year the White House’s proposed outlays (spending) are $3,721 billion; cut $7 billion and you cut less than .2% of the total expenses.  C’mon, laugh with me. 

Any good budgeter knows that in order to save, you must spend less than you earn.  With a national debt that is creeping upward from $13 trillion (you can go to this website if you want to watch it grow real-time; I recommend uncorking a bottle of wine before you do), you would think the Federal Government would be quite interested in this ‘saving’ notion.  However, this year the White House projects a $1,556 billion dollar deficit, or rather they plan on spending $1,556 billion more than they will receive from taxes this year.  Bummer. 

Take a look at the effect of the $7 billion budget cut on just this year’s budget deficit:


See the difference?  Well it’s there, it’s just very very tiny.  I understand if you want to take a look at the spreadsheet to make sure I’m not pulling your leg: Download Budget Cuts.

Shockingly, I can make $7 billion seem even more insignificant.  Consider it relative to the $13 trillion national debt. 


What can we learn from the Federal Budget?

Really the question is, what can we teach the Federal Government about budgeting?

1. To get out of debt requires that you start saving.

2. To start saving requires that you spend less than you earn.

3. Drastic measures must be taken.  As long as your budget is unbalanced in the wrong direction (more spending than earning), you will continue to add to your debt.     



Where would you make budget cuts for the Feds? I say no more bathroom breaks.

Article publié pour la première fois le 12/07/2010

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