Comparing the federal budget to the household budget

David Gura Sep 27, 2013
HTML EMBED:
COPY

Comparing the federal budget to the household budget

David Gura Sep 27, 2013
HTML EMBED:
COPY

Most individuals face a challenge in managing the money they make and the money they spend. The solution, of course, is making a budget. When it comes to talking about government spending and debt, a lot of politicians and talking heads like to compare the spending of the entire country to spending at an individual level — saying if families can manage to stick to a budget, so can the government.

The analogy makes some sense:  it’s easy to get our heads around.


Obama & the debt ceiling: An explainer

 The government is considering raising the debt ceiling — again. But what exactly is the debt ceiling: Watch an explainer to understand what’s at stake and what it means for you and me. Watch now


But Marketplace’s David Gura says the government is huge with a lot of complicated expenses. For the individual, or the family, they really only have to worry about housing, food, transportation, and a few other categories. But government spending priorities are very different: take the example of defense spending, which isn’t exactly on the family balance sheet, but takes up about 20 percent of the national budget. Plus, a big chunk of the budget goes to social welfare programs, which isn’t the same for families.

On the other side of the balance sheet, the government can also tax people and print money. They can also borrow at much lower rates than the average person.

 

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.