Tuesday, February 19, 2013

Morgan Griffith Explains the U.S. Budget

For nerds, he says. What kind of nerds? Not the math kind...these numbers have been simplified down far enough for math-challenged me. Anyway, Congressman Morgan Griffith explains the U.S. budget crisis, and shares a photo:

"Numbers for nerds, and other Americans who care – Part I
On Friday February 15 in Washington, I attended a policy meeting with guest speaker David Walker, who focused on debt and deficit issues. Mr. Walker served under both a Democrat President and a Republican President as the U.S. Comptroller General, the head of an agency overseeing the payment and receipt of public funds. He presented my colleagues and I with the following data to help us better understand the seriousness of the debt of the United States of America. The data he used is all based on official numbers of the U.S. government.

If the U.S. was a “household..."
Household Income Statement (Annual) 2012

Household Income $50,502
Household Expenses $73,417
Household Deficit ($22,915)

Overall Household Debt, Liabilities, and Unfunded Liabilities

Total Household Debt $322,205
Total Household Liabilities and Unfunded Promises $1,399,564

Using this official data, $50,502 is listed above as the “household” income because that was the median income as of September 30, 2012. The “household” is bringing in $50,502 per year, but is spending $73,417 annually -- $22,915 more than it brings in. You may come across numbers that are higher than these, but again, these numbers are based on official data collected from the U.S. government.

The numbers show that, as of September 30, 2012, every man, woman, and child in the “household” owes approximately $51,100, rounded to the nearest hundred as their individual share of the national debt. This is in addition to any credit card, mortgage, or other debt they might have incurred. Interestingly, that $51,100 owed by each individual family member is more than the annual income for the entire “household” ($50,502).

If the “household” hasn’t managed to substantially increase its income or control its spending, the resulting debt will be increasingly unsustainable and inevitably result in bankruptcy.

There are three things that you learn in Management 101 that the “household” – which from here on out will be referred to as the government – clearly doesn’t have: the government has no plan, no budget, and no performance metrics. Without these checks, you end up getting more and more spending with less and less return.

What does this mean for the future?

Unless we change course, according to the Congressional Budget Office, interest payments (which we pay for without seeing any resulting benefits) on the government’s debt will nearly quadruple in ten years, rising from $224 billion today to $857 billion in ten years. By comparison, the future interest payments of $857 billion will amount to more than we spend today on defense ($709 billion), Social Security ($773 billion), or Medicare ($478 billion).

As Mr. Walker’s data indicates, the government is digging itself deeper and deeper into a hole.

This week’s column – Part I – is intended to outline our spending problem. The information Mr. Walker presented on Friday was insightful, but numbers nerds and others wanting to see more data and in-depth analysis can visit the non-partisan Comeback America Initiative’s website, KeepingAmericaGreat.org.

Next week in Part II, we will address possible solutions – stay tuned!
As always, if you have questions, concerns, or comments, feel free to call my Abingdon office at 276-525-1405 or my Christiansburg office at 540-381-5671. To reach my office via email, please visit my website at www.morgangriffith.house.gov.

A photo of the February 15, 2013 policy briefing. "