Fiscal Cliff - Really That Bad?

[CalGun]

I feel like the media is seling us the "end of the world" is at hand with the fiscal cliff. Can someone tell me what would really
be so horrible about government cutting spending and taxing the people some more to balance its budget and get its house
in order? If it has to be forced so what - isn't this long over due?

 

[MaggieD]

I feel like the media is seling us the "end of the world" is at hand with the fiscal cliff. Can someone tell me what would really
be so horrible about government cutting spending and taxing the people some more to balance its budget and get its house
in order? If it has to be forced so what - isn't this long over due?

The "cliff" is referring to the prospects of a deepening recession if the government raises taxes and cuts spending at this particular time. Our economy is far from robust. Are we driving nails in our coffin no matter which way we go?

In dealing with the fiscal cliff, U.S. lawmakers have a choice among three options, none of which are particularly attractive:

• They can let the current policy scheduled for the beginning of 2013 – which features a number of tax increases and spending cuts that are expected to weigh heavily on growth and possibly drive the economy back into a recession – go into effect. The plus side: the deficit, as a percentage of GDP, would be cut in half.
• They can cancel some or all of the scheduled tax increases and spending cuts, which would add to the deficit and increase the odds that the United States could face a crisis similar to that which is occurring in Europe. The flip side of this, of course, is that the United States' debt will continue to grow.
• They could take a middle course, opting for an approach that would address the budget issues to a limited extent, but that would have a more modest impact on growth.

What is the Fiscal Cliff?

 

[FinnMacCool]

From what I've read, if this happens we could go into another recession.

 

[CalGun]

However there is a Fed report out suggesting a recession is going to happen anyway.

 

[rjay]

I feel like the media is seling us the "end of the world" is at hand with the fiscal cliff. Can someone tell me what would really
be so horrible about government cutting spending and taxing the people some more to balance its budget and get its house
in order? If it has to be forced so what - isn't this long over due?

I am no expert but from my understanding it is the speed and uncontrolled fashion that the changes would take place. The result would be an immediate dropping of the GNP by 4%. With GNP being at 2% currently that would put GNP at -2%, triggering an automatic reccesion

 

[ttwtt78640]

I feel like the media is seling us the "end of the world" is at hand with the fiscal cliff. Can someone tell me what would really
be so horrible about government cutting spending and taxing the people some more to balance its budget and get its house
in order? If it has to be forced so what - isn't this long over due?

The tax increases will cause job loss, creating more need for gov't social program spending. The idea that 8% more federal revenue and less than 5% lower federal spending will "fix" the 40% deficit is insane. When the "target" is a federal deficit of 38% you know the "plan" is a bust from the start. The other detail is that the "plan" is for ten years with immediate tax increases and with "later" spending cuts (when the economy gets better?). No they can't.

 

[ecofarm]

I think it's what needs to be done. Nobody wants to be responsible; that's why it is on autopilot. We bite the bullet and politicians keep their careers via "they would not compromise". No one gets direct blame. No one really voted for it.

Let's just do what needs to be done. Taxes across the board (I'd rather not this part, but whatevs) and gouge everything. Maybe we can fix it in just one generation.

 

[azgreg]

Consensus Forming for Lame Duck Deal To Delay Sequester Cuts

Consensus Forming for Lame Duck Deal To Delay Sequester Cuts | Federal Times | federaltimes.com

Lawmakers hear the clock ticking toward deep defense and domestic spending cuts, and senior members of both parties appear poised to pass a measure during a lame duck session that would add additional time to that clock.

Senior congressional Democrats and Republicans are talking openly about kicking down the road the date that would trigger separate $500 billion, 10-year cuts to planned defense and domestic spending.

 

[Lutherf]

Consensus Forming for Lame Duck Deal To Delay Sequester Cuts

Consensus Forming for Lame Duck Deal To Delay Sequester Cuts | Federal Times | federaltimes.com

My guess is that in the next month or so we will see a bipartisan agreement on Obama's proposal to end the Bush tax cuts for everyone over $250k. The trade off will be to raise SS full retirement age to 68 from 67. Beginning with the 113th Congress we will see the "real" changes which are likely to include caps on private sector earnings for executives of publicly traded corporations, dismantling of the coal industry and massive spending on solar and wind. There will be a massive move to spend our way into prosperity and the debt limits will completely go out the window.

 

[grip]

I feel like the media is seling us the "end of the world" is at hand with the fiscal cliff. Can someone tell me what would really
be so horrible about government cutting spending and taxing the people some more to balance its budget and get its house
in order? If it has to be forced so what - isn't this long over due?

The initial effects of cutting spending and raising taxes will be negative to the economy and possibly disastrous. In the long run it will strengthen our dollar, spur growth and encourage investment. It has to happen or the gov will likely declare a form of internal bankruptcy, since so much is owed to ourselves and write it off. They can't do that with debt owned by foreign interests and it might still destroy our credit worthiness but kicking the can down the road is not feasible much longer. The world markets will eventually start losing faith in our ability to manage our finances and start punishing us with bond sell offs, retracted investing, larger trade imbalances, direct payments for goods, etc.

 

[AliHajiSheik]

The cliff is a bunch of bunk. Bring it on.

 

[tech30528]

I don't think we should be touching tax rates until we have a budget. We haven't had one since Obama took office. How can you accurately determine how much income you need to meet expenses if you don't quantify the expenses? I think that should be first and foremost before any tax policy changes are negotiated.

 

[Lutherf]

I don't think we should be touching tax rates until we have a budget. We haven't had one since Obama took office. How can you accurately determine how much income you need to meet expenses if you don't quantify the expenses? I think that should be first and foremost before any tax policy changes are negotiated.

That aspect NEVER gets consideration because the common answer is "we can never have enough".

The first rule of budgeting for a government division is to come up with a reason to spend 10% over whatever you did the previous period.

The second rule is to ALWAYS make sure that there is some pending disaster that will befall the community if your department gets cut back.

The third rule is to ALWAYS support whoever is handing out the money.

As long as those rules are followed you will succeed in government. Don't take sides based on political persuasion but remember to always be the one who is most in need.

Adhere to these rules and we will successfully never run out of need for government and need for taxpayers money....and everyone will be happy.

 

[Canell]

I hope this would help.

 

[cpwill]

From what I've read, if this happens we could go into another recession.

:shrug: hey. that's what we voted for. Democracy ensures that the people get what they want, and get it good and hard.

 

[cwb01]

Going off the cliff would be the best thing that could happen to the United States. The benefits from the deficit reduction would much greater than any consequences. It would reduce the horribly high inflation rate we have in this country and keep our country from going into hyperinflation.

(Don't believe what our government tells you the inflation rate is. They do not count food and energy in those figures. If you need food, or gas to get to work, the inflation rate is very high. Our government is lying to us when they tell us that inflation rates are low so we don't have to be concerned with deficits.)

 

[CalGun]

You can't sell the American left there is high inflation. Not as long as they control the media and there is a democrat in office. Once a Republican is in charge then you can say there is high inflation.

Going off the cliff would be the best thing that could happen to the United States. The benefits from the deficit reduction would much greater than any consequences. It would reduce the horribly high inflation rate we have in this country and keep our country from going into hyperinflation.

(Don't believe what our government tells you the inflation rate is. They do not count food and energy in those figures. If you need food, or gas to get to work, the inflation rate is very high. Our government is lying to us when they tell us that inflation rates are low so we don't have to be concerned with deficits.)

 

[cwb01]

You can't sell the American left there is high inflation. Not as long as they control the media and there is a democrat in office. Once a Republican is in charge then you can say there is high inflation.

I doubt that. They will continue the same lie since they enjoy running deficits and not being resposible as well. It seems to me democrats feel deficits are ok as long as there is a democrat in office while republicans feel deficits are ok as long as there is a republican in office. Both parties are extremely irresponsible at the expense of the American people. Also I am not sure when the government started lying about the inflation rate. I am not sure whether they started lying when the left was in control or when the right was in control. Just wondering if anybody out there has that information? When did they decide to lie about the inflation rate and exclude the price of food and gas?

 

[blaxshep]

The cliff is a bunch of bunk. Bring it on.

That is what the Greeks said.

 

[cwb01]

That is what the Greeks said.

Didn't the Greeks continue to rack up debt till they couldn't anymore. Seems to me the Greeks said the complete opposite

 

[blaxshep]

Isn't that exactly what we are doing?

Don't worry all the tax increases combined will not even cover half of our deficit.

 

[dyanaprajna2011]

I feel like the media is seling us the "end of the world" is at hand with the fiscal cliff. Can someone tell me what would really
be so horrible about government cutting spending and taxing the people some more to balance its budget and get its house
in order? If it has to be forced so what - isn't this long over due?

Short answer: conservatives are just mad that money is being used to fuel programs to help our poor, instead of taking over another country for it's natural resources.

 

[blaxshep]

We would have to raise taxes 150% across the board just to balance the budget which we don't have so ...

 

[cwb01]

Going over the so called "cliff" won't balance the budget but it will reduce it quite a bit, about $750 billion. That why I say we should go cliff diving.

 

[blaxshep]

When you put it that way ... You got my vote.