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Understanding the Fiscal Cliff


Well…they say we averted the “fiscal cliff.” I suppose as a technicality, we did! But most people do not fathom the mess our legislators and present administration has gotten us into. Federal spending is out of control and remains so. We were told there would be absolutely no tax hikes for the middle class. But the reality of the situation is as follows: A deal was struck at the 11 th hour to avert fiscal calamity and not go over the “fiscal cliff.” But there were no meaningful spending cuts. And for those still at work – have you seen your paycheck lately. TAXES DID GO UP AND THEY WENT UP FOR EVERYONE – INCLUDING THE MIDDLE CLASS.

I received an e-mail the other day that put “fiscal cliff” in perspective. It went something like this:

  • U.S. Tax revenue: $2,170,000,000,000.00
  • Federal Budget: $3,820,000,000,000.00
  • New Debt: $1,650,000,000,000.00
  • National Debt: $16,400,000,000,000.00
  • Recent Spending Cuts: $38,500,000,000.00

Now let’s analyze this fiasco in terms of a household budget by removing 8 zeros so average
Americans can grasp the severity of the mess we are in:

  • Annual Family Income: $21,700.00
  • Money spent by the family: $38,200.00
  • New debt on the credit card: $16,500. 00
  • Debt already existing on the credit card: $164,000.00
  • Spending cuts the family imposed: $38.50

Do you now see ridiculous what we are being told is? WE NEED SPENDING CUTS! They say we have run out of money and they want to RAISE THE DEBT CEILING! Let’s look at it this way. Let’s say you were out having dinner. You come home to find a sewer backup in your neighborhood. You open the door to your house and find sewage up to your ceilings.

What are you going to do? Raise your ceilings or remove the waste?

And stop blaming our current situation on past presidential policy. Some say our problems stem from our war efforts in Iraq and Afghanistan. Of course I don’t like war, but the truth is, in a single fiscal year – 2010 – President Obama spent more on welfare than the Bush administration spent on the war in Iraq from the first “shock and awe” attack in 2003 until Bush left office in January.