OMG! It's the Fiscal Cliff!

[piercehawkeye45]

Here is another article explaining who will get hit and the possible effects on the economy:

But before we get to the policy -- and the graphs -- let's talk about the term. "Cliff" is an imperfect analogy. It's really more a long, rolling hill. A fiscal slope.

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You pay more. That's the three word summary of the fiscal cliff's impact on your taxes. If your household makes a typical salary -- say, $50,000 -- you should expect to pay $2,000 more in taxes next year. If your household makes an atypical salary -- say, $500,000 -- you should expect to take a $50,000 hit. The richer you are, the bigger the hit you face as a share of income. The top 0.1% would see an average tax hike of $600,000.

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The double whammy of spending cuts and tax changes will push the U.S. economy into a recession in the first six months of 2013, according to the Congressional Budget Office. Unemployment would rise to 9%. Real GDP would decline by about 3% in the first half of 2013. That's a certain double-dip.

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Nobody wants a recession. But you know what's worse than a short-term recession? A bad long-term deal. That's why some liberals are asking the president to dig in and not make a compromise with Republicans that would change Social Security and Medicare, or give up on higher tax rates on the richest 2%.

The CBO has projected that making a deal to avoid the fiscal cliff entirely would improve GDP growth by an astounding 2.9% by the fourth quarter of next year (see left). To put that in perspective, we're expected to grow by 1.5% in the fourth quarter of this year. About two-thirds of this growth would come from keeping taxes down. The rest would come from keeping spending up.

http://www.theatlantic.com/business/...atters/264990/


I'm support Obama right now with this. Extend the tax cuts for people who are more likely to spend the money (under $250,000) and make appropriate spending cuts. Nothing too extreme, I really don't want another recession, but enough to get momentum going on budget issues.