At about the time Champagne was running dry on New Year’s Eve, the Senate proposed a “solution” for the overly-hyped Fiscal Cliff. Based on the proposed “deal,” which I highly doubt will pass the Republican dominated House, it seems there was actually very little talk about reducing our deficit.
Let me explain…
The proposal consists of $15 Billion in immediate spending cuts combined with $620 Billion in tax hikes over the next decade.
When we hear numbers such as 16 Trillion and 109 Billion, it’s difficult for our minds to grasp the relative significance of a “cut” or “hike.” To most people, 109 Billion is NEVER going to sound like a small number (If you’re wondering, $109 Billion is the automatic cuts that were pushed back 60 days – just so we can relive this drama).
Putting Things into Perspective
Let’s imagine we’re talking about an individual, rather than a nation. Let’s also imagine this individual is a 22 year-old Shop-a-holic named Cindy.
- Cindy has accumulated $16,000 in credit card debt.
- Each year, she spends $1,000 more than she makes – leading to an increase in her overall debt.
The good news is that Cindy is serious about tackling her debt because she knows it’s unsustainable.
How serious is she?
She has spent the last 2 months finding a way to cut $15 out of her annual budget.
Oh, and she plans to make $600 more over the next decade.
Yep- that should do it. Way to go Cindy!
photo credit: usbacklash.org