The fiscal cliff vs. the household budget
In an upcoming opinion piece in the January/February issue of Glass Magazine, economist Jeff Dietrich discusses the recent fiscal cliff deal and its effects on the economy. A familiar face at GlassBuild America, the senior analyst at ITR Economics knows our industry. His forecasts seem to always be right on the money. So that said, I will leave it to him to explain the ins and outs of the fiscal cliff deal and what it means for our country. For now, however, I had to share an analogy he references that compares the U.S. government's fiscal issues in terms of the family budget.
Fiscal Cliff Simplified
- U.S. Tax revenue: $2,680,000,000,000
- Fed budget: $3,760,000,000,000
- New debt: $1,080,000,000,000
- National debt: $16,066,000,000,000
- Annual sequestration cuts: $ 109,000,000,000
Now, pretend it’s a household budget
- Annual family income: $26,800
- Money the family spent: $37,600
- New debt on the credit card: $10,800
- Outstanding credit card balance: $160,066
- Total budget cuts so far: $109.00
Possible solutions: 1) Ask family members to invest in your future. 2) Believe that a 2 percent raise next year will solve everything. 3) Apply for more credit cards.
I'm neither an economist nor a politician, so I'm not taking sides on the issue. But if you'd like to weigh in on how the fiscal cliff deal will effect your business in 2013, feel free to comment below.
Chase is editorial director of Glass Magazine, GlassMagazine.com and e-glass weekly. Write her at firstname.lastname@example.org.