A friend recently emailed me the following with regard to the "fiscal cliff" and the so-called debt ceiling — which really doesn't have a ceiling at all.
My friend didn't write it, and I couldn't find who did, but it's the most concise and meaningful explanation about the biggest problem facing our country I've seen to date. It was titled, "Fiscal cliff put in a much better perspective."
Lesson No. 1:
U.S. tax revenue (money collected): $2,170,000,000,000
Federal budget (money spent): $3,820,000,000,000
Difference between spending and revenue added to the national debt: $1,650,000,000,000
National debt (what we owe, but not including all liabilities such as Social Security): $14,271,000,000,000
Recent budget cuts: $38,500,000,000
Let's now remove eight zeros and pretend it's a family's household budget:
Annual family income: $21,700
Money the family will spend if they want to keep living a lifestyle beyond its means: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card (a result from living beyond their means for many years): $142,710
Total budget cuts planned by family resulting in reduction on lifestyle: $385.
Now here's another way to look at the debt ceiling.
Lesson No. 2:
Let's say you come home from work and find there has been a sewer backup in your neighborhood, and your home has sewage all the way to your ceilings. What do you think you should do: Raise the ceilings, or remove the sewage?
I thought this little vignette was the perfect demonstration of the fact that the politicians don't know what to do, but the average American clearly gets it. They understand you can't keep spending what you don't have, and you can't keep raising the ceiling because you don't have the discipline to stop spending.
At some point, the madness has to end and we're going to have to clean up all the mess.