The Budget, A Brief History of the Last Decade

I usually hate it when politicians compare the federal budget to a family's budget. Do the Jones have their own nuclear arsenal and print their own currency? No. But sometimes it's helpful to take the big complex abstractions of the federal budget and humanize them a little. Therefore I give you:

The Budget, A Brief History of the Last Decade As Experienced By:

The Jones Family	The Federal Government
About a decade ago, you voluntarily reduced your income.  You:
Took a lower-paying job to spend more time with your kids	Cut taxes (and then cut them again)
But you didn’t stop spending.  You:
Bought a new car, a big screen TV, and renovated your home.	Engaged in two wars overseas, promised to pay for seniors’ prescription drugs, and created a big new bureaucracy to protect the homeland.
Then the recession hit and your income suddenly dropped for reasons beyond your control:
Your boss cut back your hours or even laid you off.	Your tax receipts plummeted because while unemployed people pay taxes, they don’t pay nearly as much in taxes as employed people do, and unprofitable corporations pay even less.
At the same time, some of your costs increased as a direct result of the recession:
Your local government and for-profit service providers were feeling the pinch too so they raised prices and your property taxes went up, your heating bill just got hiked, your phone company raised rates, etc.	Your “automatic stabilizers” kicked in and people who never needed food stamps, unemployment benefits, or Medicaid before suddenly did, making those programs automatically a lot more expensive.
Even when you cut back or sold back some of the things you bought earlier in the decade, you still had to pay ongoing residual costs:
You sold the car but still need to pay higher insurance costs from an accident.	You ended a war but still need (rightfully so) to pay for (very much deserved) health care and other benefits for veterans returning from that war.
You acted to fix the problem:
This is where my cute analogy breaks down a little because, at the end of the day, households really aren’t like national governments. Households did take on new spending in the recession (paying for education or job training, even—according to Newsweek—getting plastic surgery) in an attempt to make themselves more appealing job applicants, but they also cut way, way back on most consumer spending.  The #1 reason that employers don’t hire in a recession isn’t taxes or regulations or secret Muslim-Kenyan-atheist presidents, it’s because there’s no demand for their products and services. Workers are laid off, they stop buying; companies don’t have buyers, they lay off workers; it’s a vicious cycle that no individual company or household can break.	As the consumer-of-last-resort, you passed a stimulus package that saved 3.6 million jobs.  (Incidentally, you also got rock-bottom prices on things you had to buy anyway, like road and bridge maintenance. It’s a lot cheaper to hire construction companies when they’re desperate for work than when they’ve got offers galore. Even if you don’t buy the argument that government spending stimulates the economy, it’s hard to dispute that a recession when prices are low is exactly the right time to spend on necessary items.)  Too bad you needed to save 13 million jobs.
There were also hard-to-believe-it-really-happened-but-it-did factors.
Crazy Uncle Bob threatened to burn down your house unless you fronted him some cash for his mortgage payment. So you did. (You did not report him to the police, but in retrospect, should have.)	The entire financial system threatened to wipe out civilization as we know it unless you bailed it out. So you did. (You did not engage in widespread criminal investigations of the frauds that led to the crisis, but still should.)