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... IluLLLIILIRARLIU 2011 LLI 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 OBAMA 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/