Comparing Federal Budget to a Household

The following letter to the editor appeared the San Antonio newspaper recently.  I think the letter-writer had a good point, but overlooked something, too.  Here's the letter, followed by my response:

"I want to provide some interesting information regarding the federal budget.

At the end of June, the government's income was $2.17 trillion. The budget was $3.82 trillion. New debt was $1.65 trillion. National debt was $14.27 trillion and recent budget cuts ($38.5 billion) totaled about 1 percent of the budget.

Now, let's take the above figures, cut off nine zeros and apply the results to a fictitious clan called the “Smith family.”

Total annual income of the Smith family is $21,700.

The amount of money the Smith family spent is $38,200.

The amount of new debt added to the Smiths' credit card is $16,500.

The outstanding balance on their credit card is now $142,710 and the amount they cut from the family budget was $385.

Do you know any family that would cut $385 from its budget in order to solve $16,500 in deficit spending? America's economic situation becomes more frightening with each passing day.

Harold Estep"

Here's my (unpublished) comment on Mr. Estep's letter:

Harold Estep's letter (The'Smith Family', 9/3/11) that puts the federal budget in terms of a family budget is helpful and apt. A family spending $38,200 a year while earning $21,700 DOES need to cut spending dramatically. But it would be stupid for the parents to say "it's unfair to ask us to work any harder: after all, we're bringing in $21,700, and the children aren't bringing home a thing! We can save a lot of money by dumping the kids and Grandma and moving to a tiny apartment."


We shouldn't expect the parents to suddenly start earning an extra $16,500 a year. But we also shouldn't assume that all $16,500 of their expenses are unnecessary. There's a middle ground somewhere: less spending AND more income. At the federal level, we need a committment to balancing the budget, not a committment to 'no new taxes.' Mr. Estep is right: we DO need major cuts in spending. But that's not the entire solution."