No Christmas miracle for fiscal cliff
With political leaders on holiday break, talks to avert automatic tax increases and government spending cuts are at a standstill.
'Twas the day before Christmas and all through the House of Representatives, not a creature was stirring -- since House Speaker John Boehner told members to go home for the holidays last week without a deal on the fiscal cliff. Members of the Senate are also with their families, and President Barack Obama is in Hawaii for a vacation. The once unfathomable prospect of about $600 billion in tax hikes and government spending cuts coming into effect at the end of the year is becoming frighteningly real.
Not surprisingly, stocks were lower in Monday's holiday-shortened trading day. Declines will likely continue until a deal emerges. So much for the Santa Claus rally.
"There's a lot of uncertainty,"said Jacques Porta, who helps manage $627 million at Ofi Patrimoine in Paris, in an interview with Bloomberg News. "We’re at a political dead end. Everything has cooled off. The market has become cautious."
Make no mistake, everyone loses if the economy falls off the cliff. People with limited means are especially vulnerable. According to The Wall Street Journal, the overall tax burdens for households earning $10,000 to $20,000 would rise from an average of $68 to $605. The more well-to-do would feel the pinch as well.
Consumers are already cutting back on spending. A recent Bankrate survey found that a third of Americans are spending less because of worries about the fiscal cliff. So far, the worries have not been reflected in the economic data, according to Reuters, but it's still early days. Retailers are expecting holiday sales to be less robust than last year.
As the cliff grows closer, the caution could morph into panic. Even if politicians come to their senses at 12:01 am January 1, the damage to the credibility of the the U.S. government will be lasting. Remember, it was Congress' plan to create the fiscal cliff so it would have little choice but to take action to avoid it.
Eventually, this problem will be solved. But then Congress will then have to take up the equally contentious issue of raising the debt ceiling. Unless the Treasury's ability to borrow is expanded, the government would be forced to close and its credit rating may face further downgrades. The debt ceiling was expanded as a matter of routine until recently.
For investors, it looks like political turmoil will mean tough sledding into January.
Perhaps some of you just don't understand how this works. The "Peoples Branch" writes the laws, it is the sole job of the president to "Sign them", we have two parties in this country. Some others have one, what would you have them do ? The Senate and the House do NOT work for the President, he can not order them to do anything. That would be The Speakers and the Leader of the Senate to retain their members. This country is NOT a dictatorship, although a recent former POTUS thought it was.
Yes term limits are a VERY good idea, however how do you get the people to vote in favor of applying them to themselves ????
How many of us have said not to reelect ANYONE and yet how many of you BONEHEADS did it any way ? You, of course, started at the to of the ballot (for Obama), working your way down saying to yourself, "well it won't be that bad". And yet here we are screaming, "IT'S BAD!!!"
So are you going to just sit there on your BLESSED ASSURANCES sipping egg Nog(with a little rum) or are going to actually get involved ? The first three words of the declaration of independence are WE THE PEOPLE - and that means YOU!!
If your advocating one term limits, then you need to be willing to step in to take their place. I almost feel sorry for some of you that voted for this crap we have in D. C. because your the ones to bear the brunt of the inaction by Obama & congress.
Don't worry about us; We not only have a 'parachute', we have fashioned a 'hand glider' of sorts. We sincerely hope that when we 'land', we can do some hiring & help get our area back on a prosperous business path without Obama & congress getting in our way !
Let fiscal cliff happen. We should have a lot of cuts and revenue which could potentially pay our debts.
The Grand Old Party is split into three camps, The mainstream Republicans, the tea party wing and the neo-cons... We the People must force the Republicans in the House to replace Johnny "one note" Boehner as Speaker and force the Senate to replace Mean Mitch McConnell as minority leader, with other Republicans, who are more cooperative and willing to compromise... The Boehner/McConnell led Republicans in the House and Senate are obstructing, blocking, delaying and scuttling legislations that would help America and all of the American people... Boehner and McConnell are worried about winning re-election in two years... They don't give a damn about America or We the People... The elected politicians in the House and Senate are sent to Washington to solve problems, not to create and cause problems... The Republicans are the problem, if We the People get rid of the Republicans, we can get rid of the problem...
I'm going on vacation for 20 days. Please solve the little problem with the financial cliff so I can return from vacation and take credit for the solution. No reason for the people to know I'm a failure. Thanks Obama
Every senator and congressman has a mandate from the voters who put them there. With the two houses of Congress under different party control, the responsibility to "broker" a mutually acceptable deal falls directly on the president's shoulders . . . and where is he? Vacationing in Hawaii. What a worthless excuse for a president.
Bring on the fiscal cliff. And if you're looking to blame someone - and you're one of the idiots who voted to re-elect this so-called leader - look no further than a mirror.
I see nobody wants to say or tell this congress how stupid an ignorant they are.
Nobody wants to say or tell this congress how stupid an ignorant they are. They don't care for one reason. They have money, they have all the benefits that a regular citizen does not have. I strongly think they do not deserve it. Years from now when they retire. Every single congress man will retire with a full pension package and they won't have to work until they die like a F###### rat. While the poor will stay and live like a rat.
Grow up and put the blame where it belongs - yourselves.
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A basic income policy can actually ensure a decent standard of living for everyone.
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