Over my head on that one, and I read most of the article
The fiscal cliff is no accident. This is something the media has been successful at portraying it as. The cliff is the direct result of politicians raising the debt limit last year without a long term plan. The only answer to this problem is increased REVENUE (note. NOT rates) and spending cuts.The rest of the article can be found here, at the Market Oracle:
http://www.marketoracle.co.uk/Article37168.html
In the third quarter of 2011 the US Congress agreed to rather severe tax increases and spending cuts that would kick in as of January 2013, as a way to get a deal done to increase the debt ceiling. In addition, the Social Security payroll tax cut and extended unemployment benefits are also scheduled to go away in January. All told, if nothing changes, this abrupt shift in fiscal policy would result in a hit to the economy of about $650 billion, or a little more than 4% of GDP, at a time when the economy is likely growing less than 2% a year.
Let me break down the major components of the Fiscal Cliff:
Abolition of the Bush tax cuts, which amount to $265 billion, of which $55 billion is for the "wealthy" and $210 billion for the "middle class" (everyone else). Almost no one on either side of the aisle wants to actually go forward with axing the tax cuts for the middle class. Republicans want to hold on to the top-level tax cuts, and to my mind that's a bargaining chip (see below).
The Budget Control Act, or the debt-ceiling deal, comes in at roughly $160 billion, with $110 billion of that in sequestration, mostly for defense; and there seems to be a growing consensus that not all of these cuts should be made.
The 2009 stimulus will also roll off (this is the 2% Social Security break and extended unemployment benefits). This amounts to $140 billion all on its own, or almost 1% of GDP. Almost everyone agrees that these tax cuts were supposed to be temporary.
The "ObamaCare" $24-billion tax increase on high-income households is almost sure to be allowed to go through.
Technically, there is $105 billion in the temporary "doc fix" and Alternative Minimum Tax, which every year are supposed to expire and every year are postponed, which of course allows Congress and the president (whoever is in control) to project lower deficits in the future, even though those cuts never happen.
If you add the $105 billion of fixes in #5 and the middle class tax cuts, you get $315 billion, or almost half of the Fiscal Cliff, which reduces the impact to 2% of GDP. Take some of the sting out of defense and you get to less than 0.5%.
They can say what they want but the truth of the matter that no one hardly talks about is that the majority of the tax burden falls on the middle class. Class warfare has been subtle so far but the amount of people in the middle class is dwindling. We are becoming extinct slowly but surely. The gap between the rich and poor is growing wider. Biden states he is part of the middle class but he lives in a 5 million dollar home. Not many politicians fall in the middle class. If you think they want to lower their standard of living you are sadly mistaken. The majority of people think that in Jan only the taxes of the rich will go up. Watch your pay check. Social Security will be taking more and so will the IRS. I am a long way from being rich but I expect O'mans attitude of my way or the highway will see our paychecks shrink.Why we are headed for trouble . Take from everyone else but give to me. Hide the truth . American can't figure it out. The so called rich pay all the taxes now they have for a long time. Any other line is just not true.
Obama wants to bring America down. Read his own words. Most will fall for it. My own union puts people in forums like this one as plants they pretend to be here for good reason but they have a real mission to plant seeds. Blame it quietly on the rich
Obama's goal is the same as his one time hero Hugo. To nationalize everything. to take over every aspect of the country.
If you think that is a good thing if you want it go for it. I don't agree. Class warfare never ends well . Obama can pay the promises he made to take and give now. He is sure we are not smart enough to figure it out . After all we are dumb sheep in need of his care. Lot of people expecting him to bring them someones else bacon well it may not show.
I am not rich but certainly not poor. The feds, state, county, locals all get plenty from me every year. Amen to the aboveThey can say what they want but the truth of the matter that no one hardly talks about is that the majority of the tax burden falls on the middle class. Class warfare has been subtle so far but the amount of people in the middle class is dwindling. We are becoming extinct slowly but surely. The gap between the rich and poor is growing wider. Biden states he is part of the middle class but he lives in a 5 million dollar home. Not many politicians fall in the middle class. If you think they want to lower their standard of living you are sadly mistaken. The majority of people think that in Jan only the taxes of the rich will go up. Watch your pay check. Social Security will be taking more and so will the IRS. I am a long way from being rich but I expect O'mans attitude of my way or the highway will see our paychecks shrink.