How we lost our AAA rating

This was sent to me in an email. This is a simple explanation for a complicated problem but it certainly is eye opening in terms of quantifying the numbers.  When you think about $2 Trillion dollars think about a stack of $1,000.00 bills 124 miles high. That’s incredible. How’s the average person driving to or from work suppose to the math on budget cuts and tax increases involving so many zeros. The answer is most of them don’t. So, what if we take eight zeros off the end and discussed this the way the average person would discuss their household budget?

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let’s put the 2011 federal budget into perspective:

U.S.income: $2,170,000,000,000

  • Federal budget: $3,820,000,000,000
  • New debt: $ 1,650,000,000,000
  • National debt: $14,271,000,000,000
  • Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to. Therefore, let’s remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.

  • Total annual income for the Jones family: $21,700
  • Amount of money the Jones family spent: $38,200
  • Amount of new debt added to the credit card: $16,500
  • Outstanding balance on the credit card: $142,710
  • Amount cut from the budget: $385