Greensburg Daily News, Greensburg, IN

Business

February 21, 2014

U.S. borrowing and future debt crisis

On Oct. 16, 2013, Congressional Republicans gave up their bitter budget fight with President Obama and approved legislation ending the 16-day government shutdown. Obama signed the bill on October 17, which also extends the federal borrowing power in order to fund the government through January 15, 2014 and raises the debt limit through February 7, 2014. Did the American people actually win?

A Dec., 7, 2012 article in The Washington Times, “U.S. borrows 46 cents of every dollar it spends”, goes over the numbers. “The government is poised to post another $1 trillion deficit in fiscal year 2013, which would mark the fifth straight year. Before that, the record was $438 billion, which came in 2008, President George W. Bush’s last full year in office.”

Another source, www.usgovernmentspending.com, shows that the current Federal deficit is about $16,738,158,460,000, or about $17 trillion. This number does not include state and local debt, and does not include the unfunded liabilities of entitlement programs like Social Security and Medicare. The Federal Debt per person is about $51,297. In 2009, our total federal debt finally equaled the total GNP, or gross national production of the entire economy.

These numbers are too huge to comprehend, so let’s put it in the context of a family of 4. Assume that the husband and wife both work and earn $80,000 annual income and net $60,000 after tax. Instead of living within their means, suppose they spend $111,111 annually. This is composed of their $60,000 after-tax income plus $51,111 borrowed on credit cards (46 percent of the $111,111).

After one year, they will owe not just the $51,111 borrowed but also interest. If this was borrowed from credit cards that charged 20 percent interest, that would be $10,222 of interest, or a total of $61,333 owed. In year 2, they borrow another $51,111 because they won’t cut spending. They now owe $61,333 plus $51,111, or $112,444. If one adds 20 percent interest, they will owe another $22,488 a year later, or a total of $134,932. At the end of 5 years, they will have borrowed $255,555 from their credit cards and owe about $153,332 in interest, for a total of $408,887 of additional debt.

Text Only
Business
  • ALDI announces deal on eggs ahead of Easter GREENWOOD - ALDI, the nation's low-price grocery leader, announced this week that it will offer eggs for $.79 per dozen. Families can dye their favorite Easter eggs for less this year. The promotion, taking place at several stores throughout Indiana

    April 18, 2014

  • MainSource Financial expanding to Cincinnati market GREENSBURG -- MainSource Financial Group, Inc. (NASDAQ:MSFG) ("MainSource" or the "Company") announced recently that it has entered into a definitive merger agreement to acquire all of the common stock of MBT Bancorp ("MBT") in a cash and stock trans

    April 18, 2014

  • DEFENDER Direct installs millionth system INDIANAPOLIS - DEFENDER Direct, the leading dealer throughout the U.S. for the home security brand ADT, reached a major milestone this week by protecting its 1 millionth customer. As crime rates continue to rise, homeowners see value in the peace of

    April 11, 2014

  • Spaghetti fundraiser to fight cancer NAPOLEON - Napoleon State Bank and St. John's Lutheran Church will host their annual spaghetti lunch - a team event to fight cancer - from 11 a.m. to 1 p.m. Monday, April 28, at the church. All proceeds from this event go directly to the Ripley Count

    April 11, 2014

  • Anderson named top branch manager GREENSBURG - Dan Anderson, Program Manager for Mainsource Investment Services, with securities offered through Raymond James, made On Wall Street's list of Top Branch Managers in 2013. Anderson was named an honoree along with 99 other branch managers

    April 11, 2014

  • Duke Energy offers warm weather energy info. CHARLOTTE, N.C. - As customers across Duke Energy service areas eagerly await the arrival of consistently warmer temperatures following a record-breaking winter, the company is offering reminders that can help save energy and money and encourage safe

    April 11, 2014

  • Inside INdiana Business With Gerry Dick Fed OKs Tower Bank Acquisition The U.S. Federal Reserve Board has approved the merger of Evansville-based Old National Bancorp. (Nasdaq: ONB) and Tower Financial Corp. in Fort Wayne. The more than $100 million deal was announced last September and To

    April 9, 2014

  • biz-gb040414-older workers logo Organization helps older workers transition back into workforce Decatur County - Older residents of Decatur County who are having difficulty finding a job have a local resource that might be able to help. Experience Works is a national nonprofit organization operating the Senior Community Service Employment Progr

    April 4, 2014 1 Photo

  • biz-gb032814-IT directory pic chuck lacy DSI names new IT director COLUMBUS - DSI has named Charles Lacy of Indianapolis as Director of Information Technology. Lacy, has more than 25 years of experience in the information technology field and has served as a database programmer/analyst and IT manager. Lacy will prov

    March 28, 2014 1 Photo

  • biz-gb032814-centra meeting gerry dick pic Gerry Dick to address Centra meeting COLUMBUS - Gerry Dick is scheduled to be the keynote speaker at Centra Credit Union's annual meeting at 6 p.m. April 7, at the YES Cinema in Columbus. Doors will open at 5:30 p.m. The meeting is free and open to Centra members and the public, subjec

    March 28, 2014 1 Photo