What would you do if your credit card balance was this big?

Sometimes it’s difficult to get a feel for economics and the concepts and amounts involved.

A friend sent me an email that’s doing the rounds on the internet and it emphasises rather nicely the issues behind the financial problems that the US currently faces.

It moves away from “grown up economic terms” to instead use an example about the US financial problems which people will find easy to understand.

They may also however find it a bit shocking.

The US financial position can be succinctly stated as:

1.    US Tax revenue: $2,170,000,000,000
2.    Fed budget: $3,820,000,000,000
3.    New debt: $1,650,000,000,000
4.    National debt: $14,271,000,000,000
5.    Recent budget cuts: $38,500,000,000

Now, if you simply remove 8 zeros and imagine it is a household budget you’ll get the following:

1.    Annual family income: $21,700
2.    Money the family spent: $38,200
3.    New debt on credit card: $16,500
4.    Outstanding balance on the credit card: $142,710
5.    Total budget cuts: $385

There. It’s easy. Who said economics was difficult?

Now, how do we go about extending the credit card limit again?