On Aug 9, 2011, at 9:55 AM, Bill Lear wrote: > Example: > > If the US Government was [sic] a family, they would be making > $58,000 a year, they spend $75,000 a year, and are $327,000 in > credit card debt. > > --- Dave Ramsey, who advocates we handle money "God and grandma's way" > > What's wrong with the picture above?
For one, the U.S. Treasury pays almost 0% on bills and about 2.5% on 10-year notes. Credit card interest is, what, 15%? Actually household debt is about 120% of after-tax personal income - credit cards and the like around 20% and mortgages around 90% (with some other miscellaneous stuff thrown in). But just looking at that ignores the asset side, which is almost 620% of income, including 140% for residential real estate. I have no idea where that $327,000 figure could come from. Federal debt is about 70% of GDP. Applying that to family income would mean about $40,000 in debt. And at an interest rate that's a fraction of credit card interest. Who's Dave Ramsey? Doug _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
