A family (Federal) budget

Dec. 20, 2012
Looking at the fiscal cliff through the lens of a household budget provides some interesting insights.

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. 

About the Author

Alan Beaulieu Blog | President

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and 60 years of correct calls. In his keynotes, Alan delivers clear, comprehensive action plans and tools for capitalizing on business cycle fluctuations and outperforming your competition--whether the economy is moving up, down, or in a recession.

Since 1990, he has been consulting with companies throughout the US, Europe, and Asia on how to forecast, plan, and increase their profits based on business cycle trend analysis. Alan is also the Senior Economic Advisor to NAW, Contributing Editor for INDUSTRYWEEK, and the Chief Economist for HARDI.

Alan is co-author, along with his brother Brian, of the book MAKE YOUR MOVE, and has written numerous articles on economic analysis. He makes up to 150 appearances each year, and his keynotes and seminars have helped thousands of business owners and executives capitalize on emerging trends. 

Prior to joining ITR Economics, Alan was a principal in a steel fabrication company and also in a software development company.

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