Debt Ceiling

28Jul11

The Associated Press cites: “At least one credit rating agency has already made it clear that unless that agreement includes at least $4 trillion in budget cuts over the next decade, the country’s AAA rating could be lost. Right now, the proposals under discussion cut around $2 trillion or less.”

One problem with these numbers is the scale. They’re so big, we don’t really understand them all, so let’s cut them to a scale we understand:

The federal budget is a little more than $7 trillion a year. The ratings agencies want $4 trillion cut over 10 years, or about $400 billion a year. Let’s just strip off some zeros.

Let’s say you earn, tax-free, $70,000 a year. That’s $5,833 a month. The cut from there needs to be $4,000 a year, or about $333 a month. Will cutting $333 from a $5,833 (still have $5500 a month available) budget be that big a whack? One wouldn’t think so.

Instead, what Obama and the Senate is offering is to cut that $5833 a month by about $167 a month AND to raise taxes.

So who’s being obstructionist now?