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

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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.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Meet the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

CPA and Chairman

Dvorkin is the author of Credit Hell and Power Up and Chairman of Debt.com.

Ask the Expert, credit cards, student loans

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Article last modified on October 15, 2018 Published by Debt.com, LLC .