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The fiscal cliff deal will add almost $4T to the deficit over the next ten years, the CBO...

  • Wednesday, January 2, 3:21 AM ET
    The fiscal cliff deal will add almost $4T to the deficit over the next ten years, the CBO calculates, citing the codification of tax cuts for most Americans. However, despite the measures, overall taxes will increase for over 75% of households in 2013, says the Tax Policy Center. Meanwhile, Republicans and Democrats are hardening their positions ahead of the upcoming battle of the debt ceiling, which has around two months to run.
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This news story has 10 comments:

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    The debt ceiling will be raised. Too many congressmen have their fingers in the spending pie to make any real cuts. Many Republicans in Congress will squawk and fuss to make it look like they're deficit hawks when in fact they're only tax hawks, and always have been. In the end few spending cuts will be made.
    2 Jan, 04:04 AM Reply Like
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    >> However, despite the measures, overall taxes will increase for over 75% of households in 2013, says the Tax Policy Center.<<

    Darn good thing Obama promised (repeatedly) to not raise taxes on the middle class or else we'd have to worry about this.
    2 Jan, 05:26 AM Reply Like
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    You can't count the payroll increase; that was temporary, so very misleading article. For less than $400k, taxes have not changed (except deduction phaseout at $250k single filing).
    2 Jan, 11:49 AM Reply Like
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    not so sure the GOP just might set it up to ruin the US economy all in a effort to get the White house back in 2016
    2 Jan, 05:35 AM Reply Like
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    Republicans have never made a stand against spending before. Why would they start now?
    2 Jan, 07:03 AM Reply Like
  •  
    The ratings agencies are not going to react well to a fiscal cliff "deal" that adds 4T.
    2 Jan, 06:23 AM Reply Like
  •  
    The ratings agencies don't care. They'll see this as a positive.
    2 Jan, 07:04 AM Reply Like
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    I would rephrase this: Investors don't care (about the rating agencies stance in regard to the "cliff deal"). What investors do care about is what is going to happen from now on? what's next?...
    Politics is beyond our grasp/forecasts anyhow; always been and always will be. What I'm struggling to decide is where will the following indices/assets be 1 year from now (or at least sometimes during H2/2013):
    1. S&P500. Most expect 1550-1650, I'm not sure...
    2. AAPL. You can find TP of 250-1100....
    3. 10Y UST. 2.5% (vast majority) or even 3%, 1.7%-2.1% (my own projection), or 1.2-1.5% (as those with "Armageddon" forecasts may say)
    4. EURUSD. 1.4 (plus) or 1.2 (minus)?...USDJPY: 100+ or 80-?...
    5. Fed funds: 0-0.25%?... I guess this "supposes" to be the easiest of all, but who knows....!?
    The crystal ball has never been more "dirty"/vague than it is now, as for 2013...
    2 Jan, 08:00 AM Reply Like
  •  
    The first downgrade by S&P occurred 4 days after Congress raised the debt ceiling in 2011. Here is an excerpt from the press release;
    •The outlook on the long-term rating is negative. We could lower the
    long-term rating to 'AA' within the next two years if we see that less
    reduction in spending than agreed to, higher interest rates, or new
    fiscal pressures during the period result in a higher general government
    debt trajectory than we currently assume in our base case.

    I have not seen the language of the bill that passed the House but the last numbers I saw to reduce spending only amounted to $15 billion. If $4 Trillion is going to be added to the National Debt, I fail to see how the Ratings Agencies will view that as a positive with regards to our ‘debt trajectory’, and I agree that we will see new ratings downgrades soon.

    I love my country and the last thing I want is to witness its failure, but I can’t see anything other than total economic collapse in our future. But I appreciate contrarian viewpoints and if anyone can point out how our current fiscal path can be maintained, I would like to hear these viewpoints.
    2 Jan, 08:19 AM Reply Like
  •  
    Japan was at AA with 200+% debt to GDP ratio.... because they can print their own money at will.

    The U.S. was downgraded last time b/c of the debt ceiling impasse, not because of the level of debt itself. I know, it's crazy, but that's how these agencies act. They see your debt/GDP as not much of a problem as long as you can monetize your debt.
    2 Jan, 11:14 AM Reply Like
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