19 replies to this topic

[Render]

US ‘fiscal cliff' would rattle world: IMF

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THE International Monetary Fund has warned US leaders that hitting the looming "fiscal cliff" would not only crush the American economy but spin havoc through the rest of the world.

http://www.heraldsun...6-1226492066682
Fiscal cliff is 'ticking time bomb' for stocks

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NEW YORK (CNNMoney) -- The race for the White House is on investors' minds, but who gains control of Congress will have an even bigger impact on the stock market.
In fact, nearly 60% of the investment strategists and money managers surveyed by CNNMoney said the outcome of congressional elections will play a bigger role, since lawmakers in the House and Senate will dictate how to resolve the fiscal cliff, considered to be the market's biggest headwind.
"Congress is key to the fiscal cliff issue, which is nearing the front burner of the market, so we place more importance on them," said Kim Forrest, senior equity analyst at Fort Pitt Capital.
According to the Congressional Budget Office and most economists, Washington's failure to address the fiscal cliff -- the simultaneous onset of tax increases and spending cuts that will be triggered on Jan. 1 -- would push the country back into recession and drive unemployment up even higher.

http://money.cnn.com...liff/index.html

"Fiscal cliff" fears may impede faster job growth

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WASHINGTON (Reuters) - U.S. job growth likely improved only slightly in September as businesses remained cautious out of fear a sharp tightening of the government's budget could deliver a big blow to the economic recovery early next year.
"Businesses are starting to focus more on the fiscal cliff," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester Pennsylvania. "It's really hard to identify the spark that's going to get us much stronger job growth until we get more clarity on the U.S. fiscal situation."

http://news.yahoo.co...--business.html

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Scenario 1: punt

A likely scenario is that Congress and the president agree to punt the issue into 2013. If this occurs, the tax cuts will not expire, tax increases won’t take effect, and the spending cuts will be delayed until after the presidential inauguration and new Congress arrives in 2013.
Scenario 2: modest compromise

Congress and the White House reach compromises on some tax and spending provisions, with the election having a significant impact on what those compromises might be.
Scenario 3: over the cliff

A less-likely scenario, I think, is that Congress and the White House fail to reach any compromise whatsoever and are unable even to agree on how to delay the looming measures. The economy goes over the cliff.
Scenario 4: grand bargain

In my view, the chance of a grand bargain taking place after the election and before the end of the year is a long shot. In this scenario, Congress and the White House would reach a deal addressing tax, spending, and fiscal issues for the medium to long term.
In addition to the fiscal cliff, the U.S. will again approach the debt ceiling early next year. While the sequence of events puts the debate over the fiscal cliff before the debt deadline, the two issues are likely to be intertwined.
The outcome of the 2012 elections matters, but the resolution of these issues is tough regardless of whether Democrats or Republicans are in control. That’s because they reflect longstanding philosophical differences between the parties about the proper role and size of the government, and how to grow the economy.

https://www.fidelity...ts/fiscal-cliff

So which scenario will it most likely be?
Why isn't a concrete solution mentioned in the election campaigns, why wait till after? it's pretty important no?

Edited by Render, 09 October 2012 - 08:03 AM.

[Corp]

It's been "imminent" for the last two years or so.

[Hilander]

We have been falling off the fiscal cliff for a decade and we are still falling just not as fast.  What the next president does could either slow it down more and possibly even reverse it or shove us over the edge even faster.

[Jeremiah65]

They will "QE- to Infinity" till the dollar is totally worthless.  My guess is that they are not quite prepared to retreat into their holes...aka...bunkers...just yet.

I think the folks making 277 times the average citizens salary (which is most large medium to large ceos) kinda likes being "special"...so they are going to prop this thing up as long as possible...until their lever rod and prop completely shatters.  It's then you'll be like "where did all the rich people go?"

I'm not worrying about it.  Not like I can do anything to stop it if it does happen.  But I work in construction engineering and for the last few months, I have been getting busier and busier...good signs from where I sit.  The fear and doom porn is just that...trying to scare folks back into their cages.

[Professor T]

The markets are no longer free.
Money is just an illusion that we all buy into..

Let it all crash i say..

[Corp]

Money has always been something a society buys into. And I kind of like civilization so I'd rather it not crash.

[Yamato]

Letting it crash would be doing the exact opposite of what we're doing.   We're blowing up the balloon instead of letting the air out because letting the air out isn't politically correct, especially in election season.

Taxes are going up next year and recessions always follow tax increases.   Government will get more tax revenue from percentage increases and less tax revenue from a weakened economy.   Regardless of what their future deficits will be after all the fiscal cluelessness goes through the wash, we will continue to print and borrow over our fiscal problems, kicking the can down the road for as long as bureaucratically possible, until we collapse like the Soviet Union in 1989.

We had the better economic system and we outlasted the Soviets; unfortunately we abused it and are probably past the point of no return now.   Is there a recession coming?   Of course there is.  There's a recession every four years in this country and 2013 would be four years from the last recession.   But that's just how the government calculates it.   When we're printing phony growth, and padding phony numbers, we've probably been in a recession the whole time but because our masters on Wall St. aren't complaining, why should we?

[Render]

So the general sentiment seems to be that nothing will change, it will only be postponed again...and again.
So why are the markets worrying then?

[Render]

Barack Obama rallies support for his 'fiscal cliff' plan

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US President Barack Obama is launching a week of public outreach in pressing his case for tax rises on the wealthy as the so-called fiscal cliff looms.

http://www.bbc.co.uk...canada-20517528

[and then]

Render, on 10 October 2012 - 07:54 AM, said:

So the general sentiment seems to be that nothing will change, it will only be postponed again...and again.
So why are the markets worrying then?

I think the worries stem from the fact that the delays are not perpetual.  They will come to an end eventually and we may well be nearly there.  Funny, I bet most people didn't think it might be a good thing if the world DID end on 12/21/12  

[Jeremiah65]

They may let the thing go over the edge just to get out of the Bush tax cuts and save face.

If they go over the cliff and the tax cuts expire, Congress can immediately pass a bill for the middle class tax cuts and make it retroactive to Jan 1st.  I think it is a ploy to jump up and down and pretend to be defending the tax cuts to keep Grover Norquist happy.  It goes over the edge, the cuts expire and they write new legislation.

If people are truly serious about addressing the deficit and the national debt...it is not going to be painless.  We like to say we don't want to pass this debt on to our children or that we need to stop "kicking the can down the road"...that is...until...someone proposes legislation that might be uncomfortable for them personally.  As long as it is "taking it from someone else"...everyone is fine with the idea.  When it's time for us to pay the fiddler ourselves...we don't want to go there.

[DieChecker]

DieChecker, on 28 November 2012 - 02:32 AM, said:

The three most common ways Liberals say to decrease the Deficit is to 1) Let tax cuts on the Rich expire, and 2) Tax corporations more, and 3) end foreign wars.

So, then foreign wars have cost (going off a liberal leaning site) 1.4 Trillion since 2001 (almost 12 years), or about 100 Billion per year. Maybe 120 billion to round up for discussion.

Then add in the revenue brought in by taxing the rich.... The reported amount of which is 600 billion over 10 years. Or about 60 Billion per year. For a total of 180 billion per year.

Then add corporate tax increases... which makes up about 8% of the Federal Revenues, or about 8% of 2.2 Trillion, or about 175 Billion. So even DOUBLING that would only add another 175 Billion to the pot.

So then we end up with about 350 Billion extra is tax hikes and ending of foreign wars per year... When we are spending 1.4 Trillion Extra per year. So, even if we do all these Super Duper Liberal Fixes... we still are going to be DOWN a trillion dollars a year. Unless.... unless... we cut other stuff and raise other taxes. Which Obama's voters are not going to like, and so... so... it is not going to happen.

Basically there is not going to be any fix without a LOT of hurt. The Rich can't carry the entire burden, neither can corporations. And ending the various Wars helps in the single digit percentages.

Entitlements are going to HAVE to be looked at and somehow fixed.

There is no way to fix the Deficit to even Bush level spending, AND be "Nice" to the middle class.

http://www.unexplain...pic=237338&st=0

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Treasury Secretary Timothy Geithner shuttled among congressional leaders yesterday with a plan to trade $1.6 trillion in tax increases for $400 billion in unspecified entitlement program cuts, Republican congressional aides said.

http://www.sfgate.co...lls-4079176.php

We're spending an extra Trillion a year, and the best cuts that are offered are 400 billion over... what 10 years? 40 billion a year in cuts out of over a trillion of Deficit.

I think even the Democrats can do better then that. I think it is time for these politicians to actually work and figure this out.

[DieChecker]

Jeremiah65, on 29 November 2012 - 03:50 AM, said:

When it's time for us to pay the fiddler ourselves...we don't want to go there.

The truth is that the 98% pay a lot of the taxes, and so to get any leverage on the Deficit and the Debt, the 98% are going to all have to eat a big crap sandwhich, for years.

Like Dave Ramsey says, "Live on Beans and Rice", while you clean up the mess... "Live like no one else, so you can live like no one else". Meaning live super sparsely so that once your debt is gone you can live however you like with the money you no longer are throwing down a credit card well. Liberals don't like this because people will complain about Standard of Living dropping. But, what else can you do? Kicking the can down the road is not going to work forever.

[Jeremiah65]

I hope you understand that was my point.  What I was trying to say, is there are many people that will shout from the rooftops that spending and the debt must be brought under control and then they will quietly push back against the measures to do so if it directly affects them personally.

I agree.  We need to be living within our means...all of us, not just the Gov.  There are needs and there are wants and there is a big difference.  Buy what you need and not what you want, pay down your debt and don't do that again.

We used to have common sense like that.

Edited by Jeremiah65, 30 November 2012 - 03:02 PM.

[Hasina]

Politicians: Bickerbickerbicker
Deadline On Horizon!
Politicians: Compromise quickly! Then claim victory for your chosen party (as long as it's one of the two major parties~) -trollface-