CHARLES DICKENS AND AMERICA’S FISCAL CLIFF

Deyan Ranko Brashich

Numbers work equally as well in Belgrade, Novi Sad and New York. Money and numbers go hand in hand. As numbers get bigger they become incomprehensible, meaningless. It is easy to grasp that a liter of gas in New York is $1.10 and $50 is needed to fill your gas tank. Real estate taxes of $7,500 for a house worth $600,000 sounds about right. A United States Senator or Representative gets paid $174,000 a year, probably too much for what they do, but still a number Serbs and I can relate to.

The budget for a small American town [Washington, Connecticut] for 2012 was $4,287,000, a figure that I can deal with, that can be attributed to specific government services, education, police and fire protection, road maintenance.To put that figure in perspective think of Washington as a town of almost 100 square kilometers with 4,000 residents spending $1,000 per resident for basic services, for living in a civilized society.

For the past two yearsCongress and the President of the United States have been embroiled in a messy brawl over money. America has had endless debates and never ending news about the “fiscal cliff” of automatic tax increases and mandatory spending cuts. Throw in a row over the debt ceiling, entitlement benefits, Medicare and Medicaid cuts and you have continuing crisis that is averted by last minute temporary fixes. But the underlying problem, the imbalance of the budget, continues to fester.

The tax revenues for the Federal Government is $2.17 trillion while the Federal budget for the last fiscal year was $3.82 trillion; new debt of $1.65 was added while the total debt stood at $16.4 trillion; current budget cuts  achieved was $38.5 billion.Trillions, billions of dollars with all of those zeroes are numbers that my mind cannot deal with. It’s when you start adding zeros that things get out of hand.

To commemorate Charles Dickens’ 200^thbirthday the Bank of England just minted a new £2 silver coin. England is another country facing financial crisis. One of Dickens’ David Copperfieldmemorable characters, the ever “cheery and blindly optimistic” Mr. Micawber, perennially in a financial bind who, by the way, ended up in debtors’ prison, said“annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness.Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

In other words America needs a budget with asurplus to pay down the trillions of dollars of its national debt.

Notwithstanding that caveat, the Bank of England saw fit to engrave on the new £2 coin another Micawberwildly optimistic aphorism “Something Will Turn Up”. To avert America’s fiscal crisis some have suggested that the United States Treasury mint a new coin, a platinum one for one [1] trillion dollars.  But that’s betting that “Something Will Turn Up”. Believe me it won’t and America will end up like Wilkins Micawber, destitute and in debtors’ prison.

In an effort to understand the “fiscal cliff” I decided to do away with those zeros, 8 of them to be exact, and to bring the federal budget down to a personal average Americanfamily level. With that said let’s do the numbers for fiscal 2012:

Money earned [Tax Revenues]                                       $      21,700

Money spent [Federal Budget]                                       $      38,200

Money borrowed this year to make ends meet              $      16,500

Money owed on credit cards [Federal Debt]                           $    164,710

Money agreed to be saved to pay back debt                          $         38.50

 

To double check my figures, just add 8 zeroes, and compare them to the numbers in the billions and trillions in paragraph 4.

 

The solution is clear. America has to earn more. That means raising taxes like it or not. America has to spend less. That means cutting the Federal Budget by more than the paltry$38.50 Congress has so far agreed upon. America can’t borrow to make ends meet. That means creating a surplus to substantially pay down its National debt. Seems pretty cut and dried to me.

 

DeyanRankoBrashich, an attorney, Op-Ed columnist, resides in New York City. “Letters from America,” a collection of essays, will be published January, 2013. His contact and blog “Contrary Views” is at www.deyanbrashich.com.