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Why the cliff matters: Eliminating mandated spending cuts and extending 2012's tax regime into...

Why the cliff matters: Eliminating mandated spending cuts and extending 2012's tax regime into 2013 could add 2.9% to GDP, according to Bloomberg's Joe Brusuelas. Of course, what the status quo means for the finances of the government down the road is a different story.
Comments (10)
  • bbro
    , contributor
    Comments (9478) | Send Message
     
    What is the government debt service to government revenue ratio?
    6 Dec 2012, 07:26 AM Reply Like
  • Joe Eifrid
    , contributor
    Comments (336) | Send Message
     
    Just another way to spin that if the spending cuts and tax increases were to take place it could cut GDP by about 2.9%. A better number I would like to see is what GDP is projected to be with or without. Even if they kick the fiscal cliff down the road GDP for next year could still be low. Whatever they decide it sounds like tax revenues will increase some, and so will spending cuts - a net negative for GDP.
    6 Dec 2012, 07:44 AM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    The Mayans are gathering for the end of the world. If they are right then the fiscal cliff will have moved forward to December 21st and the tax increases and spending cuts of 2013 will never occur. That is the newest option being bandied about in Washington. The vote is expected to occur on December 22nd.
    6 Dec 2012, 07:46 AM Reply Like
  • Tack
    , contributor
    Comments (12978) | Send Message
     
    The same day index options expire. Hmmmm......
    6 Dec 2012, 08:29 AM Reply Like
  • davidparent
    , contributor
    Comments (10) | Send Message
     
    How can the status quo add to GDP. That is ridiculous!
    6 Dec 2012, 08:49 AM Reply Like
  • nafar
    , contributor
    Comments (217) | Send Message
     
    The best course is to agree on things which are acceptable to both parties - immediately extend tax cuts for people who earns less and are not in capacity to save. Tax cuts may be avoided on people who has capacity to save and does not help in growing economy. With Government spending these extra amount would add to GDP and employment as well. Regarding expenditure cutting, all wastage to be eliminated and the amount be used for projects that helps America in near term as well as long term. I remember Jamie Dimon said - a financial guru, investment would continue what may be the tax. If i see tax to GDP ration of USA with the other developed countries, USA is in the bottom 20. Secondly Democrats and Republicans both have the view to cut loop holes in tax regime. So just get more revenue where there is agreement. So its clear investment would continue even tax hike takes place. With the economy moving, uneployment benefits would go away and so do the food stamps. So more savings to follow once the economy oves at 3% GDP growth for next 4 years. Lets not make difficult by being sticking to positions and agree on common grounds to kick start the economy.
    6 Dec 2012, 08:58 AM Reply Like
  • Joe Eifrid
    , contributor
    Comments (336) | Send Message
     
    " The best course is to agree on things which are acceptable to both parties -"

     

    Not really. If the republicans were to do that they might as well just agree to raising taxes on those earning over $200k. ($250k for couples). The democrats would just let the time run out on the rich and the tax increases would become automatic. Yeah, one could argue that those earning less are being held hostage, but on the other hand, why should those earning more carry a bigger share than what they are now?
    6 Dec 2012, 10:20 AM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    The entire burden of all of these moves will ultimately fall on the shoulder of those under that age of 40 years. They are screwed and they don't seem to understand that it is happening to them.
    6 Dec 2012, 11:40 AM Reply Like
  • Tack
    , contributor
    Comments (12978) | Send Message
     
    7:

     

    Hey, most of them, especially the younger ones (<30), have been carefully trained by our public-school system that their every need will be supplied by "benevolent" Government, so not to worry, and that to expect more than that is "unfair" and "greedy." Many of them seem to have bought it, so let them revel in their "paradise" of socialist equality.
    6 Dec 2012, 11:57 AM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    As I said, they are screwed. My generation, the Baby Boomers, are not interested in leaving anything behind for them. At least my kids will both graduate college with no student loans and a new car.
    6 Dec 2012, 03:13 PM Reply Like
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