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January 02, 2012


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This is an extract from a daily newsletter that I receive.
It shows a great example of how NOT to manage one's money.

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 your 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

The house will soon be paid off 6 years early on a 15 year mortgage and then all the rest of 1-7 will get more attention.

Old Limey,

Good post. It is very scary and, unfortunately, it is only going to get worse. We now have approximately 50% of our population living in a household that receives some kind of government benefit. This is obviously something we cannot sustain. Despite these numbers, we still have some people calling for more government spending.

I don't want to get into politics but suffice it to say that if I had been in charge, the only war we would have waged since WWII would have been the very short Gulf war, we wouldn't have our troops stationed all over the world, the welfare state would be one heck of a lot smaller, foreign aid would be miniscule, we would have a balanced budget, and the national debt would be zero.

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