A reader wants to know: If the nation can do it, shouldn’t its citizens?

2 minute read

Question: I’m 25 years old and am struggling to pay off nearly $30,000 in student loans from my undergrad and grad degrees. I’m a nurse practitioner, so I understand many mysteries of the human body — but I don’t understand finance.

For instance, why are Debt.com and other websites constantly pushing us to pay off our debts when our federal government is $19 trillion in debt? America seems to be humming along just fine, and it seems like we’ve always had this debt, at least since I was born. If the government can have trillions in debt and not suffer, why can’t I have a few thousand?
— Denise in Missouri

Howard Dvorkin CPA answers…

This is an excellent question, Denise. Sadly, you’re not going to like the answer: You’re not the federal government. That sounds obvious, but it means everything.

You have a salary that can fluctuate or even end if you get laid off. The federal government never runs out of money, because it makes you pay taxes. The federal government can give itself a raise simply by forcing you to pay more taxes.

The federal government can sell bonds to finance its debts. You can’t. The federal government doesn’t retire. You (hopefully) will someday. Then there’s this…

If the government can owe trillions of dollars, why can’t I be in debt too?

The United States is in deep debt. Our federal government owes nearly $20 trillion. As a CPA and financial counselor, I’ve said for a long time that our country needs to stick to a budget. Don’t think for one minute because the government doesn’t stick to a budget that it’s an excuse for you to overspend.

Let’s be clear: the federal government is still better off than many of its citizens. Let’s look at the numbers:

  • The federal government has an annual budget of $4 trillion
  • It owes nearly $20 trillion in total
  • That debt represents a little less than a quarter of its total annual income

Now how does this compare to you? Now imagine, if your annual salary was $50,000 and you owed $200,000 on your mortgage, car and credit card, that puts you in the same financial situation as the federal government.

If you want to be in better shape than the federal government, Debt.com can show you how to get back into the black. Visit us today, and don’t forget to sign up for our newsletters.

Yes, you heard that right. The federal government, with all its gigantic debt, is still better off than many Americans.

Last year, the U.S. Census Bureau reported the median household income in this country was just over $59,000. Meanwhile, the Federal Reserve pegged household debt at just over $137,000 — which covers mortgages, auto loans, student loans, and unpaid credit card balances.

Now, that’s still a better ratio of total debt to annual income than the federal government has. However, as I said, the federal government has more advantages and guarantees that a single household doesn’t.

There is one advantage debt-suffering individuals have over our bloated federal government: They can avail themselves of credit counseling. You can call Debt.com and receive a free debt analysis from a certified counselor at a nonprofit credit counseling agency. Over the phone, you can figure out a strategy to get those debts off your back and live financially free. If you do that, you’re better than the government.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for Debt.com. I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only Debt.com, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched Debt.com. I’m glad you’re here.

Published by Debt.com, LLC