Thanks to a reader for this which explains why “averting the Fiscal Cliff” has not actually happened. The finances of the US Government are in terms of GDP/Debt ratios pretty much where Greece was just a few years ago. And the trend is not good…
Lesson # 1:
U.S. Tax Revenue: £2,170,000,000,000
Federal Budget: £3,820,000,000,000
New Debt: £1,650,000,000,000
National Debt: £14,271,000,000,000
Recent Budget cuts: £38,500,000,000
Let’s now remove 8 zeros and pretend it’s a household budget:
Annual family income: £21,700
Money the family spent: £38,200
New debt on the credit card:£16,500
Outstanding balance on the credit card: £142,710
Total budget cuts so far: £385
Got it? Obama has not. But I reckon most folks can see that the sums do not add up.
There was a lesson #2 attached involving sewerage but I think the point is well enough made already.
Another analogy is with a 20 a day smoker. The budget cuts agreed to date equate to him cutting out one cigarette….a year.