The Federal Stimulus

With "Trillions" now supplanting "Billions" in the federal government's approach to the budget and stimulus, it becomes tough to put the numbers in perspective.  So your faithful reporter will give it a shot:

First, let's break down the numbers on a per citizen basis.  (I'll use 300 million as the current US population)

                                                                                            US TOTAL                Per Citizen
                Annual Revenue (Tax receipts)                    $2.9 Trillion                $9,667
                Annual Deficit                                                   $482 Billion                $1,607
                Current Debt                                                     $10 Trillion                 $33,333
                Stimulus Plan                                                   $750 Billion                $2,500
            
Okay, what does this mean?  Well, it takes $9,667 per citizen to pay for the cost of our Federal Government.  If you're household is not paying at least $9,667 in taxes, per person, it means someone else is covering your costs.  And given the annual deficit of $1,607, it really takes $11,274 in taxes (per person) to cover your cost of the government.

If we were to try to pay off the Federal Debt, tomorrow, we would need $33,333 from every person in your household.  Pretty scary, isn't it?

Let's look at it in another manner.  For this analysis, I've assumed the Federal Government is the average tax-paying household in the country (earning $55,000 per year).  I then indexed the Federal Government revenue to that $55k amount to look at the other numbers in comparison. 

                                                                                               US TOTAL                Ave. Household
                Annual Revenue (Tax receipts)                    $2.9 Trillion                $55,000
                Annual Deficit                                                   $482 Billion                $9,141
                Current Debt                                                     $10 Trillion                 $189,655
                Stimulus Plan                                                   $750 Billion                $14,244

What do these numbers mean?  Here, I'm looking at the Government as if it were the typical American family (Joe Household).  Joe and his family earn $55,000 per year.  They are spending $9,141 beyond the $55.000 of earning each year.  (They likely wouldn't be "credit worthy" to any responsible bank).

The Joe Household family is trying to support $189,655 of debt with their income.  (Certainly irresponsible.)

Finally, to get out of their "economic funk" Joe and his family are now agreeing to spend $14,244 to "jump start" their economic condition.  It's analogous to the family deciding to go into debt by another $14,000 to invest in the stock market, or a new business, with "Hope" for the future.  

Seems sort of ridiculous when it's put in that context, doesn't it?  Of course, the stimulus package already looks ridiculous without my analysis. 

 

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Comments

  • 2/20/2009 11:20 AM Jeff Howell wrote:
    One solution would be to encourage the next generation to be like the Octuplet mom to increase the population, which creates future demand. This increases the average household from 4 to 10, thus decrease the individual responsiblity. This plan is no different than destroying the value of the dollar with a "stimulus plan"
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