Comparing U.S. Budget to Household Budget

What do you think about this video? (2:26)

My thoughts about the video
This video really hit home for me, especially, because the number they used for a household income was exactly what I earned in 2011 (not counting my wife's income).  Putting the numbers into perspective is fairly easy when they match mine almost exactly.  As far as perspective goes, I can't even begin to imagine spending within my household budget the way the government spends.  Let's take a look at the numbers...

• Income: $55,000
• Spending: $96,500 (or +175%)
• Difference: $41,500 (added debt)
• Old debt: $360,000
• New debt: $401,500

Using ratio's, the above numbers represent exactly how the United States government spends money and accrues debt!  At the end of the video, they state that somebody who is used to living on $96,500 needs to learn how to live on $55,000.  I would argue that they actually need to learn to live on less if they hope to ever pay off any of the debt.

One might argue that the actual federal debt could be compared to a mortgage by an average household.  This argument wouldn't hold up for two reasons.  One, a bank would never give a $400,000 loan to somebody with a $55,000 income.  Two, a mortgage is a debt backed by an asset (the house).  The government's debt is not backed by solid assets that could be sold in order to pay the balance.  So, as pointed out in the video, the government's debt is better compared to credit card debt within a household.

If I woke up and realized that I had just spent $96,500 last year to bring my household credit card debt up to over $400,000, I would be bankrupt!  These numbers are unfathomable within a household budget, but somehow seem manageable within the government's budget.  How is this possible?

The only possible way to dig out of this kind of debt within a lifetime is to drastically increase income.  Sure, this is possible within a household, but not likely.  Within a government though, politicians and citizens will be arguing until the end of time about how to increase revenues.

What do you think?  Is the U.S. government bankrupt?  Is this even a possibility?  What if we just said to China one day, "Sorry, we're bankrupt.  We're not repaying any of our debt to you."

The video on this post is from Dave Ramsey's YouTube page.  I cannot verify the validity of the numbers used in the video as I did not research them myself.