As of Thursday, going over the “fiscal cliff” in five days is practically a done “non-deal” in the United States Congress under the leadership of President Barack Obama because political leaders on both sides have had no success in getting the other side to see “their way” of avoiding the “fiscal cliff”. Additionally, the biggest clue that the “cliff” is inevitable is that Senate Majority Leader Harry Reid stood before media cameras in Washington, D.C. on Thursday to blame the Republicans for going over the “cliff”, according to CNN. Sen. Reid – a key player along with House Speaker John Boehner and President Obama – has basically given up.
As the nation goes over the “fiscal cliff” next week, the question should not be whose fault it is – but instead, the question is: What does going over the “fiscal cliff” really mean? Proving once again that the cliff is all about money, the primary sources answering this question are all financial sources such as the CNN Money website.
In a nutshell, there are increases in Americans’ taxes by law and there are spending cuts that become the law of the land.
There are degrees of severity regarding the tax hike, all depending on how long Congress allows the “fiscal cliff” to remain the law of the land. If the remnants of the “fiscal cliff” last throughout the entire year of 2013, economists are quite certain that the United States will soon be in a recession as a result. The effect of the recession, according to financial experts at the Congressional Budget Office, will increase the nation’s current 7.7 percent unemployment rate back up to 9.1 percent. Also, it is being predicted that there will be a .5 percent drop in the real gross domestic product. Neither of these results, naturally, is any good for the country.
Due to the negativity of the results of going over the “fiscal cliff”, many believe that being over the “cliff” will be short-lived – expecting Congress to finally come to some sort of agreement, even if it’s temporary again, that will end the financial situation the “fiscal cliff” puts the nation in. Unfortunately, some of the most-expected resolutions to the “fiscal cliff” would include past measures such as raising the country’s debt ceiling which puts the nation back in its continual situation of spending more money than it brings in – which is how the nation got in this mess in the first place.
There are those who believe staying over the “fiscal cliff” is the only way out – for the good of the country but not its individuals suffering through the remedial stages.
For now, working Americans who receive a paycheck should expect to see smaller amounts in their take-home pay because the government is going to keep more of Americans’ income in the form of taxes starting in Jan. 2013.