Bergheim Follies: FOD 2012.12.10

Monday, December 10, 2012

FOD 2012.12.10

Let's imagine for a moment that obama was your financial adviser. A scary prospect, to be sure. Most of us would run screaming from his office. But we would be hard-pressed to quantify exactly why that notion fills us with such dread. The numbers in the federal budget are so large that it's hard to wrap our minds around them. So let's bring them down to a scale we can understand.

By taking the government’s economic numbers and dividing by $100 million we can simulate a household budget, and here’s what that household financial situation would look like for 2013:

Income: $26,000
Spending: $37,000
Deficit: $(11,000)
Debt: $170,000

If President Obama were your financial adviser he would propose that you cut spending by a whopping $1,000 per year. That plan would take 11 years to get spending in line with income and accumulate an additional $55,000 in debt. Interest payments would increase to greater than 30 percent. I hope that plan sounds as ridiculous to you as it does to me.

If any professional financial adviser put this plan in front of a paying customer he would be laughed out of business. Yet this is what passes for intelligent financial banter inside the D.C. Beltway.

Even worse, obama is advocating for new stimulus spending in his avoid-the-fiscal-cliff proposal. After all, the last stimulus worked out so well [sarc off].

His new proposal includes "tens of billions of dollars of little-noticed stimulus measures."

The stimulus measures in the White House’s debt proposal stem from President Obama’s long-since-scuttled American Jobs Act proposal, and include a continuation of emergency support for long-term unemployed workers, an extension of the payroll tax cut, billions in infrastructure investment and a mortgage refinancing proposal.

We here at Bergheim Follies have received an advance notice of just exactly how the stimulus package will affect ordinary working Americans. By the time it trickles down to us it will include: