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Understanding the Fiscal Cliff and the Debt Ceiling

Jim received a great email from a listener that puts all these fiscal cliff discussions in perspective for us.

 

Understanding the Fiscal Budgets
Flickr User 401(K) 2013

 

Lesson # 1:

* U.S. Tax revenue: $2,170,000,000,000

* Fed budget: $3,820,000,000,000

* New debt: $ 1,650,000,000,000

* National debt: $14,271,000,000,000

* Recent budget cuts: $ 38,500,000,000

 

Let’s now remove 8 zeros and pretend it’s a household budget:

* Annual family income: $21,700

* Money the family spent: $38,200

* New debt on the credit card: $16,500

* Outstanding balance on the credit card: $142,710

* Total budget cuts so far: $38.50

 

Lesson # 2:

Here’s another way to look at the Debt Ceiling:

Let’s say, You come home from work and find

there has been a sewer backup in your neighborhood….

and your home has sewage all the way up to your ceilings.

What do you think you should do ……

 

Raise the ceilings, or remove the crap?

 

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