# Making Our Large Nation's Debt Of \$15 Trillion Real And Understandable

No matter how you measure our national debt, in absolute dollars, in dollars as a percentage of GDP, government spending as a percentage of GDP, etc., our Federal government spending is out of control and getting worse. It has been particularly devastating and out of control ever since the Democrats took control of both houses of Congress after the midterm elections of 2006. Another way to look at our \$15 TRILLION national debt is to actually see it written out:

\$15,000,000,000,000

That’s a lot of zeros. Since it is our national debt and all Americans are going to have to pay it off at some point in the future, the personal household share of \$15 TRILLION comes out to about \$132,000 for each household. Think about how you are going to work that new expense into your household budget this year.

And remember, the \$15 TRILLION is not a fixed amount. Under the long term, 10 year budget Obama proposed back in the spring, a budget that was unanimously rejected by the Senate, under the most optimistic assumptions Obama’s proposed budget would add another \$9 TRILLION on top of the \$15 TRILLION.

But, we are getting crazy, the numbers are almost too large to understand. So let’s make it simple. The late 2011 Federal budget disaster looked like the following:

* 2011 U.S. Tax revenue: \$2,170,000,000,000

* 2011 Federal budget: \$3,820,000,000,000

* New debt in 2011: \$ 1,650,000,000,000

* National debt as of late 2011: \$14,271,000,000,000

* Recent budget cuts: \$ 38,500,000,000

Let’s now remove 8 zeros and pretend it’s a reasonable but low income 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

Thus, if the U.S. Federal national debt was scaled to a reasonable low income, U.S. household budget, that household would never again get any credit since no one and no company, short of a loan shark, would ever extend credit to a household in this financial situation. This household would never get a mortgage to own a house, would never get a car loan for a new car, or be able to attend a reputable college since they would not get any kind of student loan. Nice life.

Another way to view the national debt scaled down to a reasonable household level is to imagine that the household did not eat, did not drive a car, did not shop for clothes, Christmas gifts, or anything else, or pay taxes or utility bills for seven years. If it did this abstaining for seven years, then and only then would it be able to pay off its \$142,710 credit card debt, given their current household income stream.

And that is assuming a credit card interest rate of 0%. Not very realistic, which makes the debt situation even more distressing since a household cannot go seven years without eating, driving, etc.

Once you scale the problem down to a household level, you can begin to imagine and comprehend the dire straits the nation’s financial situation is in. In fact, it will likely take decades and generations of Americans, acting frugally, to tame the wild spending of the American political class over the past decades and especially over the past five years of Democratic Party rule.

And that assumes the current politicians we are stuck with finally grow a backbone and begin to honestly level with Americans on how bad they have made the problem and the painful steps that will have to be taken to remedy the situation. That is asking a lot and that is why we need to start implementing some steps that are needed to fix thisd dire problem:

Step 1 – reduce Federal government spending by 10% a year for the next five years by reducing Federal government employee headcount, stop deploying American troops all over the world for no good reasons, eliminating government agency and department redundancies, eliminating obsolete or dysfunctional government functions, reforming Medicare, Medicaid, and Social Security, and eliminating fraud and criminal activity in Federal Government programs..

There is no rational reason for us to still have well over 100,000 troops deployed in Europe, South Korea, and Japan. The need for these deployments went away long ago.

We need to clean up the fraud in government social programs and tax evasion which wastes up to half a TRILLION dollars a year.

We need to have our politicians do a lot of the boring, government efficiency things and not be so concerned about their own political careers and only dealing with big issues, that never get resolved anyway.

And the really scary part of this whole plan is that even if the Federal government had reduced its 2011 spending of \$3.820 TRILLION by 10% a year for five years, it still would not get to a balanced budget in which expenses had been reduced enough to equal of be less than the 2011 revenue stream of \$2.170 TRILLION.

It would be close, within about 4% or so, but expenses would still exceed revenue in this hypothetical case.  Five years of 10% reductions a year might still not be enough to get a balanced budget. And it certainly will not be enough to start paying down the \$15 TRILLION national debt.

Step 2 –  impose term limits on all Federal politicians, “one and done.” The current set of people in Washington got us into this mess. I doubt they know how to get us out of the mess they created or even have the will to do so. We need to start generating a new class of politicians who will do the hard job of governing efficiently rather than the bad job of politicking inefficiently.

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