As I read the story over at Flopping Aces about the CBO’s score of President Obama’s budget, I could not help wonder how I could run my household this way. Not that it would be a good idea, to even think it is insane. When doing a personal budget the “rule of thumb” is your housing cost should run no more then 1/3 of your total income. Does Congress look at the big picture? Overall spending vs. revenue?
Under the President’s budget, debt held by the public would grow from $7.5 trillion (53 percent of GDP) at the end of 2009 to $20.3 trillion (90 percent of GDP) at the end of 2020. As a result, net interest would more than quadruple between 2010 and 2020 in nominal dollars (without an adjustment for inflation); it would expand from 1.4 percent of GDP in 2010 to 4.1 percent in 2020.
That’s right ladies and gentlemen, read that one again…. 90% of our GDP by 2020.. 2020 may seem like a long ways away, however its less then 10 years.
Keep in mind when you are planing on your retirement or when you started planning for it. I bet you thought the dollar would still be worth something. However at this rate it won’t even be worth printing the dollar as we know it now.
Just think if you ran your household like this, How long would it take for you to be in bankruptcy court? We already have some pretty high taxes and we are pretty much taxed on everything we buy or do. The only way out of this is for Congress to freeze spending and then take a long hard look at where the money is going…
