The fiscal cliff deal is being praised by the mainstream media as some kind of huge compromise by the president. But this is only the case if it is seen from the perspective of someone who only watched the negotiations, and knew nothing about the United States’ financial big picture.
The term economics comes from the Greek root oikos meaning household and nemein meaning to manage. The nation definitely needs to get its fiscal house in order, so what if the government were like a household that had to balance its budget?
Let’s take a look at fiscal year 2013′s projected numbers:
- U.S. tax revenue requested: $2,900,000,000,000
- Federal budget: $3,800,000,000,000
- New debt (low estimate): $900,000,000,000
- National debt: $16,443,000,000,000
- Recent budget cuts: $15,000,000,000
- Outstanding debt liabilities: $86,800,000,000,000
Now if you picture these numbers like a household budget by removing 8 zeroes, you’d get the numbers below:
- Annual family income: $29,000
- Family spending: $38,000
- New debt in 2013: $9,000
- Credit card debt: $164,430
- Mortgage (on the future): $868,000
- Cutting expenses: $150
Beyond this parable, there is the fact that the U.S. government has the largest tax-to-spending shortfall of any major developed nation.