How does your spending compare with that of the typical American?
To help you find out, the data visualization site HowMuch.net put together a graphic using 2016 Bureau of Labor Statistics numbers. It illustrates the priorities of an average family, which makes just over $74,000 a year and shells out about $57,000.
That family spends 8 percent on health care, 12 percent on insurance and pensions, 12.6 percent on food, 15 percent on transportation and 33 percent on housing. Charitable giving doesn't register, and neither do expenses related to education or personal growth; presumably, both are grouped in the 7 percent spent on "other."
For comparison's sake, here's how America spent its $3.84 trillion in 2015, according to the National Priorities Project.
About three-quarters of the nation's spending went to three big-ticket items: the military (16 percent), health care (27 percent) and social security, unemployment payments and other labor costs (33 percent). If the average family spent an equivalent percentage on defense, it would be dropping over $9,000 each year.
America as a whole has different priorities than the families living within it. A scant 2 percent of the country's budget goes to housing, for example. Another 2 percent goes to transportation, while 4 percent goes to agriculture and food. If the average family spent an equivalent percentage on food, it would dine out, and order in, on only $1,140 a year.
There are many good reasons to think of a nation's budget differently than a household's. A country, for example, can handle a deficit more comfortably than a family can, some experts argue.
"Even with ever-growing debt (and one downgrade), markets are still more than fine not only with giving the U.S. plenty more ability to borrow, but to do it at remarkably low rates. No American household has that kind of leeway," reports U.S. News. "After all, they can miss credit card payments once in a while without tanking the economy. The United States, says one expert, simply won't do that."
Personal finance author Helaine Olen agrees. As she writes in the Guardian, balancing a nation's budget shouldn't be a high priority for much the same reason that austerity doesn't help nurse nations back to financial health. Unlike an individual in the red, a country is often right to keep spending, and is often rewarded for doing so.
Still, interest on America's debt makes up a significant chunk of its annual budget: 6 percent, or $229 billion a year, which is about $200 billion more than America spends on science (1 percent, or under $30 billion) or energy and the environment (1 percent, or about $45 billion).
That's why Dave Ramsey believes America should try to balance its budget. "You can't borrow your way out of debt, whether you're a typical American family or the entire U.S. government. At some point, you've got to say, 'Enough is enough!' and make the hard cuts necessary to win over the long haul," he writes.
President Donald Trump is set to reveal his plan for tax reform Wednesday, which experts say will largely benefit corporations and the wealthy, cutting the top individual income-tax rate from 39.6 to 35 percent and potentially creating loopholes for businesses, reports CNBC.
Experts expect tax reform to add to the deficit, especially since the president's proposed discretionary budget for 2017 increases spending in some areas, such as on the military.
"Unless the nation and its various interest groups agree to sacrifice their tax breaks in exchange for lower rates with no deductions — and it is far from clear it would be a sacrifice for most of us — there is no way to enact significant tax cuts without raising the deficit. Period. End of story," writes columnist Caroline Baum for MarketWatch.
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