Financial aid cuts won’t solve budget crisis
Regarding Bob Paddock’s letter wherein he states the government should run its affairs like a well-managed household: Hare are a few numbers for him and for others, who I often hear make this ill-informed statement:
If you are a typical American household you have a car payment or two because you took on debt to buy the car(s), you may have a mortgage payment and college loan payments, household improvements, vacations and more all covered by debt, none of them bad things, it’s what makes our economy tick. So let’s not assume all American households are debt free. They borrow, just the like the government.
In fact, the average American household in 2012 had debt equal to 105 percent of its annual income. The U.S. government will carry debt equal to 68 percent of its gross domestic product in 2013. Running our government like Americans run their households would be a step backward. Foreign aid in 2012 was $23 billion dollars, less than 1 percent of the federal budget, much of it for disaster relief and humanitarian aid such as is taking place in the Phillipines this week.
We will spend $689 billion on the Pentagon, $773 billion on Social Security and $732 billion on Medicare this year. The government budgets 6 percent annually to service its debt. The average household in America budgets between 15 and 40 percent for debt. Cutting foreign aid to balance the federal budget is like trying to balance your household budget by finding loose change under the cushions on your couch. Third grade economic theories won’t balance the budget.
Gary Hattenburg
Kailua-Kona