Last week, people started sharing an image on Facebook that claimed to put the budget issues facing our country in perspective by comparing the numbers to a household budget. Just like my last post, that makes sense if you don't really think about it.
The problem with this analogy is that the situation is far more complex than the comparison allows. For starters, a worker cannot raise his household revenue in the same way a government can. Yes, a family member could work more hours or get a second job, but that's assuming that the hours or job is available. As many people today will tell you, getting a job, let alone a second job is far from a sure thing. A government, meanwhile, has many ways to raise revenue that are guaranteed.
On the other side, government debt and household debt are vastly different. A government can borrow money at a rate close to zero percent, while a household has to pay a much higher rate. In addition, a government can get far more value for their borrowing than a household can.
That's not to say that our government does not need to spend less. I'm simply saying that the comparison between a household budget and a government budget is so flawed as to render such a comparison meaningless.