Obama's Lockbox

[HappySqurriel]

mirgro said:

HappySqurriel said:

 

That's an assumption which may not be based in reality ... and (with how the US government is being run) would you really say that someone who is building up $10,000 per year in credit card debt and saving $1,000 a year (in a savings accout) for their children's college is saving any money for their children? What if they spend that $1,000 a year and reduce their credit card debt growth to $9,000 per year?

 

I haven't followed fiscal history enough to know whether saved up money goes to paying off debt or not, but it seems like it would work just fine if everything is prioritized alright.

 

If the goal is to pay off the enourmous debt then taxes have to go way up and spending has to go way down. The truth is every single person in this country owes over 40k. That includes old and young alike, literally everyone. That's an average family of four one year worth of income, so to pay it off they must give up four years of their income completely. Something to think about.

Except its not paying down the debt, its reducing the deficit and the debt is still growing at an amazingly rapid pace ... In my example over a 10 year period this is the outcome of the options (assuming 5% interest rate for savings and debt)

year	Total Debt	Deficit	savings	networth
0	0.00	10,000.00	1,000.00	1,000.00
1	10,000.00	10,000.00	2,050.00	-7,950.00
2	20,500.00	10,000.00	3,152.50	-17,347.50
3	31,525.00	10,000.00	4,310.13	-27,214.88
4	43,101.25	10,000.00	5,525.63	-37,575.62
5	55,256.31	10,000.00	6,801.91	-48,454.40
6	68,019.13	10,000.00	8,142.01	-59,877.12
7	81,420.08	10,000.00	9,549.11	-71,870.98
8	95,491.09	10,000.00	11,026.56	-84,464.52
9	110,265.64	10,000.00	12,577.89	-97,687.75
10	125,778.93	10,000.00	14,206.79	-111,572.14

 

year	Total Debt	Deficit	savings	networth
0	0.00	9,000.00	0.00	0.00
1	9,000.00	9,000.00	0.00	-9,000.00
2	18,450.00	9,000.00	0.00	-18,450.00
3	28,372.50	9,000.00	0.00	-28,372.50
4	38,791.13	9,000.00	0.00	-38,791.13
5	49,730.68	9,000.00	0.00	-49,730.68
6	61,217.22	9,000.00	0.00	-61,217.22
7	73,278.08	9,000.00	0.00	-73,278.08
8	85,941.98	9,000.00	0.00	-85,941.98
9	99,239.08	9,000.00	0.00	-99,239.08
10	113,201.03	9,000.00	0.00	-113,201.03

 

In both cases you end up $110,000 and change in debt