A family (Federal) budget

Concerned over the fiscal cliff? Well, that’s probably a given. Cutting through the numbers and headlines can be quite confusing, but a recent email from a subscriber simplified the fiscal cliff discussion when pictured as a household budget. 

Fiscal Cliff Simplified                                                                  

* U.S. Tax revenue: $2,680,000,000,000                                                 

* Fed budget: $3,760,000,000,000                                                          

* New debt: $ 1,080,000,000,000                                                            

* National debt: $16,066,000,000,000                                      

* Annual sequestration cuts: $ 109,000,000,000                     

Pretend It’s a Household Budget (remove 8 zeroes)

* Annual family income: $26,800  

* Money the family spent: $37,600             

* New debt on the credit card: $10,800      

* Outstanding balance on the credit card: $160,066

* Total budget cuts so far: $1,090

Possible Solutions:

1) Ask family members to invest in your future

2) Believe that a 2% raise next year will solve everything 

3) Apply for more credit cards 

Nowhere are there contingency plans for job loss, unforeseen disasters, death, retirement, savings, illness, etc. Now see if the proposed solutions being discussed by both Democrats and Republicans make any sense. To read more about the fiscal cliff and its future economic impact, check out this month’s ITR Advisor, our monthly subscription newsletter.