Everybody Has A Crazy Uncle

If at first you don't succeed, skydiving is not for you

You know, there are some things that just can’t be done.  Like a do-over on a bad parachute jump, for example.  Or stopping a cat from chasing a mouse.  Or not laughing yourself silly at the non-stop budgeting tragedy/comedy coming out of Washington — which provides daily proof for comedian Will Rogers’ line that “The only time the nation is safe is when Congress is not in session.” 

The current Romper Room Rumpus is over cutting the budget for 2011.  And the combatants are hard at it.  They are fighting tooth and nail over cutting small billions of dollars from a HUGE multi-trillion dollar budget.  Yes, I am aware small billions is an oxymoron to mere mortal citizens like you and I.  But not in Washington. 

Cutting billions from this size budget is like a 500 pound man saying he’s serious about his diet and arguing with himself about whether to eat one less potato chip a day or two.  It’s just not going to make a difference. 

To show the budget food fight for the insincere folly that it is, you have to scale the numbers down to something you and I can relate to.  So I chose the international standard of the typical Wal-Mart shopper. 

Let’s say I have a crazy Uncle Sam, who makes $40,000 a year (what the average Wal-Mart shopper makes).  Now most of us shop at Wal-Mart, and everyone has a crazy uncle in the family.  Shoot, I’m a crazy Uncle myself, come to think of it.  But I’m not nearly as crazy as Sam. 

Anyhow, you might say he has a bit of a spending problem.  He just doesn’t know when to stop.  Of course, us nephews and nieces always asking him to buy us stuff may be a factor, but hey, we’re entitled, aren’t we? 

But back to Uncle Sam, because this story isn’t about me, it’s about him and his modest income of $3333 a month. 

But here’s the problem.  He spends almost $5384 a month.  Yep.  Every month.  That’s over $2000 a month more than he makes.  You might wonder how he does that.  Then again, you might not.  He spends the good ol’ American way – he uses credit cards.  He’s got a wallet full of them … ummm … kinda maxed out these days, but he keeps getting new ones, so he just keeps on spending. 

I mentioned he’s been doing this for some time, right.  So he has some … uh … pretty hefty credit card balances.  The last time we looked, his credit card balance was $261,960.  And he doesn’t get very good interest rates either so he has to pay over 20%.  That’s $5461 a month, or a whopping $65529 a year.  Just in interest … hmmm … remember, Uncle Sam makes $40,000 a year, right. 

Now you may think this is pretty hopeless, but lately Uncle Sam has been having a real turn of heart on his spending and debt situation.  He’s decided to cut way back.  He even has this powerful argument with himself about whether he should get real serious and cut back $46 a month or get laser-like focused and cut out $92 dollars a month.  You can sure tell how dead serious he is about getting this under control when you see drastic cut backs like that (chuckle).  Oh, and I forgot to mention, one cousin suggested he should cut back by $765 a month, but everyone said he was crazy and the idea was quickly dismissed. 

We all feel real encouraged about the whole thing because, hey, it’s a start.  As a matter of fact, all of us nephews and nieces have been so jazzed we asked him if he’d buy us all a new car with the savings.  And he said sure, now that he’s getting serious about reducing his debt he’ll have plenty of money. 

I think we should all root for Uncle Sam, don’t you?  You go, Uncle Sam! (I’ve got my eye on a new Ferrari). 

So how did I come up with the numbers for my fictitious Uncle Sam?  Simple, really.  I just looked up the Federal revenue ($2,178,412,918,286), budget deficit, etc. and scaled them down to his $40,000 income.  Just so we could relate to the numbers and understand the farce for what it is. 

So when you see the “cut the national budget comedy” on TV tonight, here’s the line-up.  Remember, Uncle Sam has credit card balances over $261,960, an annual income of $40,000, and he spends $2000 a month more than he makes.  His Democratic relatives are arguing mightily to cut back $46 a month.  His Republican relatives are resolved that he cut back $96 a month.  And that crazy cousin I mentioned that suggested $765 a month.  He’s a Libertarian.  Not picking sides here, but the crazy cousin seems to be the least crazy of them all. 

Like I said in the beginning, it seems there are just some things that can’t get done.  Like getting a do-over on a bad sky dive.  Or not laughing yourself silly at the budgeting comedy coming out of Washington.  I mean, you just can’t make this stuff up.  So I have a few questions for you.  They are … 

1)      Do you think most of these folks are serious about cutting spending?

2)      How much do you think Uncle Sam should cut his monthly spending (I bet someone get’s wild here and suggests the $2000 a month he’s spending over his income)?

3)      Most important, do you think I will get my Ferrari? 

Have a great day – J. Daniel 

Note 1: By the way, they aren’t really cutting spending – even with the “so called” cuts, the budget will be more this year than last (except for the Libertarian’s proposal).  That’s just Washington speak for increasing it less than they really want to. 

Note 2:  Here are the numbers I worked up.  This is just a rough estimate based on the proportion of Sam’s income to the Federal Government Revenue.  So there may be some distortions.  But even if I’m off by 10 times, it’s still a great American Comedy.

Crazy Uncle Sam's budget and spending problem

Note 3: Over the past day or two as I was writing this post, the budget deficit increased by about 3 billion dollars – awesome! 

Note 4: You will definitely want to see the real time US debt clock at http://thewoodchips.com/uncle-sams-play-dough

Note 5: Other sites I used for my research are …



2 Responses to “Everybody Has A Crazy Uncle”

  1. Thea says:

    This is by far one of THE BEST explanations I have read explaining The Federal Deficit/Budget. Thanks for putting it in lay[wo]man terms so that everyone can understand it. I shall share this RIGHT NOW! And if you don’t mind, I’d love to feature this some time on my site.

    THANKS :-)

  2. Peter Wright says:

    I really enjoyed your post about Uncle Sam and the national budget. As you say it’s great comedy, but with respect you have missed the obvious solution.


    What the Fed needs to do and Uncle Sam needs to hope for is a serious dose of inflation like Zimbabwe experienced in the earlier part of this decade after they ruined their economy by wiping out the only sector that earned any real money. Inflation was eventually measured in the 1000′s of percent.

    In that period, I sold a used truck that I had bought for $100 000 for over $1 million. I sold a lot of other stuff for 10, 100 or even 1000 times what I paid for it.As I had operated on a sizeable bank overdraft which was still denominated in Zim$, with price increases like that it didn’t long to pay off the loan even with interest rates of 40% and more.

    As far as paying off debt was concerned, the fact that the currency was worthless was not the point.

    So if inflation was just over the horizon, then your Uncle Sam should borrow a couple of million, buy stuff that will hold its true value, like Woodchips cartoons, gold etc. wait for inflation to hit then start selling it all at a huge (paper) profit, pay off his debts, then do it all over again.

    I think I have gone full circle in my argument here, isn’t that what the Fed and many other governments are already doing?

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