Putting the numbers into perspective

August 8, 2011

The principles of running an economy aren’t very different from those of running a household with a lot more zeros.

But all those zeros are difficult to grasp. US financial writer Dave Ramsay put the big numbers into perspective:

“If the US Government was a family, they would be making $58,000 a year, they spend $75,000 a year, and are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget and debt, reduced to a level that we can understand.”

Wilkins Micawber reckoned overspending one’s annual income by just five pence resulted in misery for an individual.

Continuing to overspend a country’s income by much bigger numbers will eventually result in misery for many more people.

All political parties have a duty to ensure that we don’t keep on spending more than we’re earning. That’s why National is determined to get the government’s books back into surplus as soon as possible.

Parties of the left don’t appear to understand the importance of this and are still promoting policies which will increase taxes and spending and make little or no attempt to cut costs.

What they’re proposing is like a household adding to the mortgage and credit card debt to buy luxuries. The impact of that might not be noticed in the short term. But the medium long term result will be misery and those who will be most miserable will be the poorest who have fewer of their own resources on which to fallback.

Hat Tip for the Ramsay quote: Lambcut at Roarprawn


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