The Deficit:: A Tale of Two Houses

THE DEFICIT: A Tale of Two Houses Prologue: In 2011 the USA's credit rating was downgraded for the first time in history. Yet even as we cut back on spending, our debt continues to rise... BUDGET BUDGET $ 2,170,000,000,000 Revenue $ 2,800,000,000,000 (Incoming $) Federal Budget (Outgoing $) $ 3,820,000,000,000 $ 3,803,000,000,000 $ 1,650,000,000,000 New Debt $ 100,300,000,000 $ 38,500,000,000 Budget Cuts $ 468,000,000,000 National Debt $14,271,000,000,000 Shouldn't increased National Debl $17.156,117,102,204 revenue, less debt and greater budget cuts lead to a LOWER National Debt? Hmmmm. LET'S TRY LOOKING AT THIS ANOTHER WAY: What if this were a typical family's annual household budget? 2011 Budget 2013 Budget Income 28,000 Income 21,700 - Expenses 38,200 New Credit (16,500 Card Debt Expenses 38,030 New Credit (10,030 Card Debt DEFICIT IS OBVIOUS Outstanding 142.710 Card Debt Outstanding 171,561 Card Debt Budget Cuts: $4,680 Budget Cuts: $385 Here's the moral of the story THE 2013 FAMILY: » Put 39% fewer charges on their credit card Wahhh, » Made 92% larger budget cuts » But owes 20% more on their exorbitant credit card debt (Which now equals 6 years, 1 month of total family income to pay off) WHAT CAUSED THIS CRISIS? Under Clinton, we had a surplus, and a much stronger foundation. How does recent presidential spending deviate from this path? government Spending: From Clinton to Obama $3T $2.3 Trillion surplus we would have had today if Clinton-era spending continued $0 $86 Billion Surplus when Clinton leaves office Bush Era Tax Cuts, Wars in Afghanistan and Iraq. and Bush-era domestic and defense spending are by far the largest contributors to the deficit $-8.3 Trillion Combined Bush/Obama -$8.3T contributions to the deficit BUSH ОВАMА 200 Billion 2008 Stimulus PROJECTED COSTS: 400 Billion Mandatory Policies (Farm Bill) -250 Billion Middle Class Tax Cut 300 Billion Unfunded prescription •126 BILLION Defense Spending Savings drug benefits for seniors -800 Billion Recovery Act 1.4 Trillion Afghanistan and Iraq Wars -400 Billion One time emergency investments 1.7 Trillion Domestic and Defense Spending 3 Trillion Bush Tax Cuts TOTAL -$7,000,000,000,000 TOTAL: -$1,324,000,000,000 Other losses from the Clinton surplus to today: 3.6 TRILLION 7 BILLION Debt issued for government financing (student loans, similar initiatives) Due to lower tax revenue (Economic and Technical changes) We need: GREATER LOWER TAXES OR EXPENDITURES ..or BOTH (and FAST). Brought to you ACCOUNTINGSCHOOLGUIDE.com Iu…MINMU Citations http://www.treasurydirect.gov/NP/debt/search?startMonth-11&startDay-01&startYear-2013&endMonth-&end Day-&endYear- http://gainesvilleteaparty.org/hot-topics/economy/standard-and-poors-downgrade-simplified/ http://en.wikipedia.org/wiki/2013_United_States_federal_budget http://www.nationalreview.com/corner/277873/bringing-budget-numbers-down-size-carrie-lukas http://www.washingtonpost.com/blogs/wonk- blog/post/obamas-and-bushs-effect-on-the-deficit-in-one-graph/2011/07/25/gIQAELOrYI_blog.html http://www.whitehouse.gov/infographics/us-national-debt http://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton/