toomuchtime_
Gold Member
- Dec 29, 2008
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With each other. After watching their two speeches on fiscal cliff hard to see how they are going to find middle ground to avoid this
There are no good choices here. Both tax increases and spending cuts will tend to slow down our already sputtering economy, and it is our slow/no growth economy that is the principal cause of our soaring deficits so any combination of these measures provides only a temporary fix at best for our deficit problems.
On the other hand, if they allow the country to go over the fiscal cliff, allow the Budget Act of 2011 to go into effect,
Among the laws set to change at midnight on December 31, 2012, are the end of last years temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, the end of the tax cuts from 2001-2003, and the beginning of taxes related to President Obamas health care law. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect. According to Barron's, over 1,000 government programs - including the defense budget and Medicare are in line for "deep, automatic cuts."
What is the Fiscal Cliff?
and this could possibly send us into another recession, but with the upside that the deficit would be cut in half as a percentage of GDP.
In addition to all of this, the US will hit its $16.4 trillion debt ceiling at the end of the year, meaning Congress will have to decide whether or not to raise it again.
Republicans in Congress who bend more than a little to reach a compromise, which would only kick the problem down the road a little, will likely face strong challenges in the primaries for the next elections, and those who refuse to budge will will have to face some angry voters in the general election. The same is true for Democrats in Congress. So what will Congress do? Whatever they decide, it will be bad for the country, either gradually over the next few years or all at once on December 31.