The first benchmark to fix in your mind is how much money does the US Government get from all sources, other than borrowing, each year. It's about $2.4 trillion ($2,400,000,000,000).
The second benchmark is how much the US spends. It's about half a trillion ($500,000,000,000) more than it takes in or $2.9 trillion.
The third benchmark is the amount that the US spends on entitlement programs (social security, medicare, medicaid, government and veterans pensions mainly). Entitlements cost about 1.8 trillion.
Uncle Sam gives almost all of the money he gets to old folks, veterans, and people who need medical care. What's left, about half a trillion, isn't enough to do everything else. Hell, defense alone costs more than that. So that's why we need to borrow half a trillion a year.
There's a big problem here. It's not sustainable. Back in 2008, before the election, when the Republicans were running things, a nifty little report was published called "The Federal Government's Financial Health" and it said just that -- not sustainable. They were looking at 2007 numbers, before the financial crisis, before the bailout, before the stimulus, and before the Obama budget.
The reason it's not sustainable is those entitlements and the interest on the debt are growing fast.
It's crunch time unless we roll back those expenses or jack up taxes. If we jack up taxes, who's going to pay them?
Well, take a look at your W2 form. See where you fit in the table above. It's you and me who are going to pay, and our kids, and our grandkids. Oh the rich folks will pick up about 2/3's of the tab, just like they have been doing, maybe more if the income tax gets more progressive. But all of us will be paying something, and it will hurt.
And yes we have some hard choices to make. How would you balance the budget? Would you summarize your answer in a sound bite for the 11 o'clock news?
