new year's headache
Posted in the Rochester Forum
Since: Nov 11
#1 Dec 23, 2012
NEW YEAR'S HEADACHE
Partly by fate, partly by design, some scary fiscal forces come together at the start of 2013 unless Congress and Obama act to stop them. They include:
— Some $536 billion in tax increases, touching nearly all Americans, because various federal tax cuts and breaks expire at year's end.
— About $110 billion in spending cuts divided equally between the military and most other federal departments. That's about 8 percent of their annual budgets, 9 percent for the Pentagon.
Hitting the national economy with that double whammy of tax increases and spending cuts is what's called going over the "fiscal cliff." If allowed to unfold over 2013, it would lead to recession, a big jump in unemployment and financial market turmoil, economists predict.
WHAT IF THEY MISS THE DEADLINE?
If New Year's Day arrives without a deal, the nation shouldn't plunge onto the shoals of recession immediately. There still might be time to engineer a soft landing.
So long as lawmakers and the president appear to be working toward agreement, the tax hikes and spending cuts could mostly be held at bay for a few weeks. Then they could be retroactively repealed once a deal was reached.
The big wild card is the stock market and the nation's financial confidence: Would traders start to panic if Washington appeared unable to reach accord? Would worried consumers and businesses sharply reduce their spending? In what could be a preview, stock prices around the world dropped Friday after House Republican leaders' plan for addressing the fiscal cliff collapsed.
Federal Reserve Chairman Ben Bernanke has warned lawmakers that the economy is already suffering from the uncertainty and they shouldn't risk making it worse by blowing past their deadline.
And Obama's on vacation???(go figure)
Since: Nov 11
#2 Dec 23, 2012
WHAT IF THEY NEVER AGREE?
If negotiations between Obama and Congress collapse completely, 2013 looks like a rocky year.
Taxes would jump $2,400 on average for families with incomes of $50,000 to $75,000, according to a study by the non-partisan Tax Policy Center. Because consumers would get less of their paychecks to spend, businesses and jobs would suffer.
At the same time, Americans would feel cuts in government services; some federal workers would be furloughed or laid off, and companies would lose government business. The nation would lose up to 3.4 million jobs, the Congressional Budget Office predicts.
"The consequences of that would be felt by everybody," Bernanke says.
Don't worry, Obama feels your pain while on his
FOUR MILLION DOLLAR tax payer funded VACATION.
“Reality is settling in...”
Since: Nov 08
Stop sweating the small stuff.
#3 Dec 23, 2012
While you enjoy YOUR headache....I'll be having a grand time.
Happy, Happy New Year.
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