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.