Fiscal Cliff & Debt Ceiling for Dummies

[Dave Doehrman]

This is a pretty easy to understand explanation of the Fiscal Cliff and Debt Ceiling. Something has to give before everything we own or earn is confiscated and distributed to those who are too lazy or unwilling to work and support themselves.

Fiscal Cliff in easy to understand terms

Lesson #1:
· US 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

Now let’s remove 8 zeros and pretend it’s a household budget:
· Annual family income: $21,700
· Money the family spends: $38,200
· New credit card debt: $16,500
· Outstanding credit card balance: $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’s been a sewer backup in your neighborhood…. and your home has sewage up to your ceilings.

What do you think you should do…….
Raise the ceilings or remove some crap?

 

[bulldog]

I' been using a similar analogy using income versus mortgage, but I never considered
using a sewage back up to describe the Debt Ceiling. Kudos! Very Illustrative!!!