Can someone or everyone explain the fiscal cliff in a....

non partisan way?

Is is just slight spending reductions? or is there more to it. I feel like the media is being unclear and I don't want to do the research. If you understand it, can you explain it in simple terms?

Thanks in advance.




...part of why I ask is it seems that the type of hype that is desired is not building, I am wondering whether deep down, we want to tighten the belt and work harder. But that may not be what it really is so, this is why I ask.

It is the result of laws previously passed that all expire in Dec, combined with last August kicking the can on debt ceiling deal, combined with they have mostly all been on vacation the past 6 months campaigning and not doing their job. In a nutshell.

The Fiscal Cliff is what the country actually needs to do, trim spending, raise taxes, but the politicians don't want their fingerprints on it.

So when the cliff actually comes, both parties can blame the other for this "medicine" the country needs to take.

It will be like taking a pay cut. Taxes will go up, the middle class and lower class will feel the pinch the hardest.

Here is a good summary and article:
http://m.briefing.com/investor/our-view ... mmary-.htm

The so-called fiscal cliff consists of the expiration of a number of legislative acts, ane the introduction of new taxes, including:

Bush Era Tax Cuts - the Economic Growth and Tax Relief Reconciliation Act of 2011 and the Jobs and Growth Tax Relief Reconciliation Act of 2003
Obama Era Tax Cuts – the American Recovery and Reinvestment Act of 2009
Estate Tax Cuts - Part of the EGTRRA, but analyzed separately by the Tax Policy Center
Expiration of Alternative Minimum Tax Increase, also part of the EGTRRA
Payroll Tax Cut - the cutting of the Social Security payroll tax from 6.2% to 4.2% in 2011
New Taxes created by the 2010 Health Care Legislation
Extenders – a variety of short tax provisions enacted individually – these are analyzed as a group by the Tax Policy Center and include such things as accelerated or bonus depreciation for businesses and work opportunity tax credits.


edit- there is also the $16T debt ceiling and automatic sequester cuts from last August.

So I broke down and read the wikipedia page.

Seems like the bottom line is a 1/4% spending cut with a 20% tax increase, so it is primarily a tax increase by the numbers.

It also says that the CBO has calculated that this is pretty much a trade off of now vs. later.

We can keep the policies we currently have (we owe 69% of what we produce as a nation each year) and move to 100% of annual output being owed in 2021 and 190% national annual output being owed in 2035. If we do this they predict moderate growth sooner as the benefit of this long term cost.

If we do the minimal cuts and large tax increases (or reverting to the old rates), the CBO says we will have slightly negative grown in the near term and much more long term stability and would reduce public debt below current levels by 2021 (58% of the national output).

Seems like the fiscal cliff is a good idea (this is now my opinion vs. the CBOs, if they are not far off), the only thing missing are some real spending cuts to go with the increases in tax rates. Seems like the only major damage of going off the cliff is the short term reputation of some politicians.

Seems like this is good for the right and the left because they both have control of the govt right now and they collectively represent such a thin slice of what is politically possible. They need to encourage stability or they risk having the other 99% of perspectives come to light and then their political job will get exponentially harder. They could be forced to actually debate current issues or give up power. It think no one has more incentive for stability than the power players. Given this, I assume that massive greed of those running the country will likely do the right thing in the short and long term in order to keep their jobs, there is the right incentive to do so.

I think when times are good there is space to be greedy and take advantage of the people. With all the unoccupied space in the political spectrum, these bad times are testing our cohesiveness as a nation. In good times the people are most at risk from bad govt, in bad times, I think the govt is more at risk of loosing it's job. Once the people give up hope, there is no hope for the leaders.

I think I like the fiscal cliff, I think I want us to climb higher, cut deeper, get to zero debt before it slips to yet another generation. If we act now, we can limit most of the payments to Gen-X and older, those that benefited from the spending. All the spending did was screw those younger (look out window now).

LOL, thanks for coming back around and giving an information rich response relative to your 1st.

Think of it as a person who flies to a 5 star Caribbean resort with their lover - and enjoys all the amenities it has to offer - has breakfast in-bed, and campaign at bedtime

---

eventually, the trip comes to an end --- and the guy at the checkout desk is going to hand you a bill.

The fiscal cliff is checkout time ----

There's no way in heck we can sustain this 5 star trip ---- it's time to pay the bill.

The lovers stare at each other for awhile, standing there in front of the clerk - arguing (loudly) about who exactly ran the bill up so high.
(that's where we are, right now).

Eventually - he'll call their accountant, who will roll their Visa balance over to their Mastercard - allowing them to pay with their Visa Card (and he's very happy to know they'll get 1% cash back).

Mastercard will sell the note to some investment banker in the Republic of Green Bananas, who has an MBA from American University, where they taught him that credit markets offer a great investment - and the world will be happy again.

I find it interesting that nobody here, and (of course) nobody in the media is even mentioning the massive amount of government waste that is part of this issue. Like the $744,000 soccer field we built for terrorists, and the extravagant Florida and Las Vegas retreats for government employees, ...the list goes on and on.

I wish we had a President who would promise to address government waste.

Waste is a concern - but it only represents a small percentage to the fundamental problem.

The problem is --- one person's waste is another person's treasure.
(I don't consider USAID waste, for the most part my own pet peeve is student loan subsidies - which I consider waste)

Even if we got rid of the biggest pet peeve waste items ---- we'd still be left with a major structural problem.

Why I can't get excited about the "fiscal cliff"

Like many — if not most — Americans, after two years of showdowns and almost-shutdowns and filibusters that look suspiciously more like a 15-minute vote than a 15-hour oratory and breathless punditry about who is destroying a country and a democracy that seem pretty well intact, I’m having a lot of trouble caring. I’m having a lot of trouble caring because each and every one of these showdowns is unsubtly engineered by a political machine that values confrontation over compromise, and flashy names, inchoate ideologies and cutesy acronyms over serious negotiation, honest principles and the occasional compromise for the good of the people they’ve supposedly been elected to serve. I’m having trouble caring because all of these showdowns result in the same thing: a gentleman’s agreement to put off doing anything permanent until no one needs to be reelected and some sort of pissant policy change that lets everyone claim some sort of victory for their side rather than anything useful for the country. And I’m having trouble caring because these little showdowns somehow always manage to have a positive effect on revenues for the lobbyists whose corporations and clients would be affected by the changes, and for the media establishment for whom any crisis means more eyeballs.

http://www.rawstory.com/rs/2012/11/29/w ... s-bullsht/

As for that $744,000 soccer field at Gitmo....

GUANTANAMO BAY U.S. NAVAL BASE, Cuba, March 1 (Reuters) - The U.S. admiral in charge of the Guantanamo Bay detention camp is defending the decision to build a $744,000 soccer field for well-behaved prisoners, and said critics misunderstood the facility's purpose and logistics.

Rear Admiral David Woods said the camp's mission was not to punish foreign captives unnecessarily, many of whom have been held there for 10 years already. He said his job is to detain them away from the battlefield under safe and humane conditions, and that providing socialization opportunities was part of that.

http://www.reuters.com/article/2012/03/ ... C520120301