Please note – the story below is one which we received in an email from a client. The numbers are not exact but they paint a pretty realistic picture of the U.S. Debt Problem. The Congress and Super Committee of 12 are trying to come up with budget cuts amounting to $1.2 trillion over 10 years. Their deadline is November 23rd.
Here is why S&P downgraded the US credit rating: · US Tax revenue: $2,170,000,000,000 (trillion) · Fed budget: $3,820,000,000,000 (trillion) · Deficit & New debt: $1,650,000,000,000 (trillion) · National debt: $14,271,000,000,000 (trillion) – before this year · Recent budget cut: $38,500,000,000 (billion) · Proposed budget cuts by the Super Committee over 10 years: $1,200,000,000 (trillion)
Now let’s remove 8 zeros and pretend it’s a household budget: · Annual family income: $21,700 · Money the family spent: $38,200 · New debt on the credit card: $16,500 · Outstanding balance on the credit card: $142,710 · Total budget cuts: $385 · Proposed budget cuts over 10 years: $12,000 total As you saw in the numbers above, a $1.2 trillion cut over 1 year would not prevent the debt from increasing. Over 10 years that only amounts to $120 billion per year!! How unreasonable! And it appears they won’t even be able to agree on that.
Let’s hope for a miracle.
Sincerely, Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA Edward J. Kohlhepp, Jr., CFP®, MBA
Please contact us whenever there are any changes to your financial situation, personal situation or investment objectives. Source: Anonymous
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