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Making Sense of the Fiscal Cliff

posted Oct 16, 2013, 10:13 PM by Tim Isbell   [ updated Oct 16, 2013, 10:34 PM ]
A few days ago a friend sent me a helpful analysis that likens the U.S. financial situation to that of an American household. This reduced the numbers to something that we all can understand.

Then it went on to suggest how a household would respond to the problem, implying that the government should do something similar. My assessment is that the suggested response was poor financial advice for a household - and its parallel is poor financial advice for the U.S. government.

So this morning I sat down and wrote a webpage about all this, and then waited to see how Congress would process these issues throughout the day. By the end of the evening both the Senate and the House had voted to end the government shutdown and to raise the national debt limit. So I made one last revision of the webpage and posted it on the site. 

Whether you agree with my conclusions or not, this webpage provides a helpful, simple framework for understanding the issues. The U.S. will revisit these issues many times over the upcoming months and years, so spending 15 minutes reading about them now will pay off.

To read the the webpage click on Fiscal Cliff in Perspective.