This does help explain the recent downgrade of US government debt. And makes it clear that continuing to add to the national debt is not a sustainable idea.
This is the best analogy I have seen for a while! This rather brilliantly cuts thru all the political doublespeak we get.
Why the U.S. was downgraded:
* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000
Let's now remove 8 zeros and pretend it's a household budget:
* Annual family income: $21,700
* Money the family spent: $38,200 (much of it interest on existing credit card debt!)
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts: $385
Got It!
