Fiscal Cliff Explained

[Trader]

“Fiscal Cliff” put in a clear perspective which explains why so many of our American colleagues are dead against tax increases of any kind.

 

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

 

Have you got it????

 

OK now,

 

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?

 

Tough decision, Eh?????

[bongobobny]

Now THAT's the best interpretation I've ever heard!!!

[CaptainJoe]

Neither ...

I'd take the insurance money and move...

 

Exactly like the laffer curve predicts...

Edited December 23, 2012 by CaptainJoe

[jfoster]

What's gonna be interesting is the huge population growth from 1940's to the 60's (baby boomers) are now starting to retire. That's a huge amount of tax payers leaving the work force. Interesting how long it will last before the whole system collapses. The upside is all the job oppurtunities they will leave open for a lessor/younger work force.

[MiCarl]

There are two (minor) problems with your numbers:

 

1) They're over two years old (it didn't improve since then)

2) The budget cuts aren't cuts in the sense your family understands cuts. They're reductions in the spending increase. Only in Washington can increasing spending 3% instead of 5% be a cut.

[RandyR]

There are two (minor) problems with your numbers:

 

1) They're over two years old (it didn't improve since then)

2) The budget cuts aren't cuts in the sense your family understands cuts. They're reductions in the spending increase. Only in Washington can increasing spending 3% instead of 5% be a cut.

 

The congress learned that from my ex-wife.

 

" Honey, I bought this $200 dress and saved us $100 by not buying the $300 dress I really wanted" !!!!

 

 

[MiCarl]

The congress learned that from my ex-wife.

 

" Honey, I bought this $200 dress and saved us $100 by not buying the $300 dress I really wanted" !!!!

 

 

 

I guess we were married to the same woman. Hated it when I came home from the grind to her proudly exclaiming "Guess how much money I saved you today!".

[Venturous Randy]

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

 

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

 

 

* Total budget cuts so far: $38.50

 

QUOTE]

 

Not that it reeeeeally matters that much, but if you remove eight zeros, it would be $3.85 instead of $38.50. So it is actually worse than you think.

RandyA

[Mike G in SC]

My mom zinged me once (well often really).

 

She had been shopping, spent a couple thousand on jewelry, handbags, shoes and such,,, but all at really good prices.

 

I asked her "Nice Mom, but what are you going to do with all that money you're saving?"

 

She didn't miss a beat and said, "Why, Mike, that's your inheritance."

[tomephil]

My mom zinged me once (well often really).

 

She had been shopping, spent a couple thousand on jewelry, handbags, shoes and such,,, but all at really good prices.

 

I asked her "Nice Mom, but what are you going to do with all that money you're saving?"

 

She didn't miss a beat and said, "Why, Mike, that's your inheritance."

 

 

 

I have to wonder if that joke is shared by our kids...