National and international finances were a big, scary black hole for me a few years ago. What's a trade deficit? What's a budget deficit? How can the government spend my social security contributions? What does "balanced budget" mean to a government, and why does it differ from what it means to me?

After two years of occasional research--and thanks in no small part to my boss Osama--I now have a better understanding of what it all means. At lunch yesterday we were talking about a tax return that showed people where their money was going. You wouldn't just have line items for contributions, deductions and exemptions, but for each area of spending. I'll give you that new tax return at the end of this article.

First let's start with a quick review of where the budget stands. Have a look at this chart. It shows US government income (and this is net income after refunds, not their cheaterpants gross income):

See the year in which the government's income peaked? 2000, the year before Bush took office. Now you can see the effect of the government's tax cuts... and the increase in spending. Please also note that the claim that the tax cuts would be offset by increased revenues in other places is nonsense, because the revenue has been declining steadily since 2000. If you cut taxes, the government makes less money. Period. There is no magic taxpayer from whom the government can collect revenue. Americans don't willingly give their money to the government. Despite deluded Republican leaders' claims to the contrary, without some sort of consumption or use tax there's no other way to get the lost revenue.

Also, with tax cuts that work the way the administration claims they do, you'd expect to see a precipitous drop and then a slow increase in revenue as the number of taxpayers expanded and their taxable wealth increased. Not true, and their own numbers show it. They can't even make up for it in other types of tax, say on the corporations who see the increased revenue from these newly wealthy people buying SUVs and building little white picket fences around their homes in the suburbs. Check out what the IRS has to say about the type of tax that's responsible for its revenue. (These numbers are gross numbers and don't count refunds, but the proportions speak for themselves.)

All other types of taxes have either stayed essentially flat or dropped. So where's the money coming from?

Bush's Fairy Godmother!
Um, seriously: nowhere.

We should have a quick look at the chart that shows income versus spending again:

Whether or not you agree with taxes, you have to agree that, to provide services, the government must pay for them. If the government provides a service then they have to have the money to fund that service. If they do not provide a service then they can cut their revenue accordingly, because they no longer need the money to pay for the service. This is basic math. If you want a big screen television or a trip to Cancun, you have to give somebody money for it. Right? Right.

But that's not what the government is doing. They don't have enough to pay for the services that they are offering to you, the taxpayer. What this means is that the debt is increasing at a truly offensive rate. We should look at that on a chart to give us a better idea of the scale of irresponsibility:

Holy shit!

Time for the new tax return. Check last year's tax return. Find out how much you gave to the government and subtract how much you got as a refund, or add how much you had to pay them.

• Example 1: You paid $5000 in income taxes and. You got a $1000 refund. You should put "4000" in the field below.
  
• Example 2: You paid $5000 in taxes. You had to pay them an additional $500. You should put "5500" in the field below.