Your thoughts on the fiscal cliff?

What do you guys think about it? Do you think we're going to go over? If so what kind of effects do you think it will have?

I think we're going to go over it, and I am kind of glad we are. If we didn't go over now it'd just be pushed back later and later, and eventually it'd fuck us over. I am glad that it's happening while I am young so that the economy will be more stable as I get older?

Any thoughts?

 

It's hardly a cliff. Its just when lots of tax breaks end and a shit ton of spending cuts kick in. If they just would think long term, invest in the future, reform entitlements (raise the retirement ages), cut defense funding, raise taxes slowly, reform patents, reform copyright, legalize pot, etc and we'll be fine. If we go over, we'll go into a recession for a bit and then it will pick back up and be fine.

 

x339 no offense. Read some newspapers instead of just skimming the titles. The fiscal cliff isn't something that is pushed back.. It is a collection of all the possible reforms (including tax breaks, spending cuts, health reforms/obamacare, and many other reforms) that will impact the amount of money the government will have. As of now we are facing a huge deficit, some people believe to be priced at 70 trillion. Which in my opinion will fuck our generation over. Social Security will definitely collapse on itself, especially with the trust fund being a fake entity. There is no money in the trust fund.

"go over it"... What are you talking about... Of course we're going over it. The budget cuts are definitely happening thus the term fiscal cliff.. There's no pushing it back. It's either we choose to cut our budget and relieve the deficit, or we continue to spiral into debt, issue out more treasuries and bring the U.S. economy to shit.

 

That's the name it's been given so that is what I call it. Anyways, I agree so much of it seems common sense, but with the partisan politics going on in Washington it's impossible for either side to see straight. In my opinion if we went over the recession that would follow wouldn't be too major, and it would basically force them in to acting.

Excuse me? You didn't have to come in and insult me on this. I have been following the fiscal cliff ordeal since it became popular in the media. I watch CNBC almost all day long, and it's all they've been talking about, so I think I know the specifics. Instead of jumping to conclusions (like I could have with your dumbfuck name of "Swag Money"), think about the situation.

The fiscal cliff is the result of temporary tax cuts and policies that are now set to expire. Essentially I believe that if they come to some sort of deal, it's simply going to push things back a bit with more temporary things set in their place. The republicans and democrats are not agreeing on anything, and if is any sort of deal is to come, it's most likely going to be one like what caused the fiscal cliff in the first place.

By "going over it", I mean that no deal will be made. Perhaps it's you who needs to do more than listen to the headlines on fox news, because that's pretty common terminology for this whole situation.

Anyways... I agree that our generation is going to be screwed by many of the systems in place if nothing is done, but I don't think this is the time for that to be fixed. Right now we either get some shotty half-witted compromise in place, or we go over and Washington gets a nice kick in the ass motivation to get this done, which why I said it'd be beneficial for us to "go over".

 

From my understanding, it is largely the Bush Tax cuts expiring, and a large decrease in government spending.

Overall, it will be a good thing in the long run. Government spending is always funded at the expense of private entities. It can be funded directly through taxation, or indirectly through loans from various institutions which crowds out the private sector. A reduction in government spending means (a) less taxation (but this is not the case), or (b) an increase in the availability of money for the private sector (this is the case).

Since the private sector now have more money to borrow (since the government spends less, thus needs to borrow less, leaving more funds for private sector), this will result in a much better allocation of resources. Since the private sector is the sector which generates all the wealth in the US, this will increase people standard of living over time as there as been an expansion in wealth. An expansion in the private sector will also increase competition and put downward pressure on prices, increasing the purchasing power of consumers, and again, their standard of living.

The increase in taxation however will reverse this effect as it diverts wealth away from the private sector towards the public sector, and the opposite of the above will be true. That said, since the deficit will decrease, it means that there will be a net movement of 'money' if you like towards the private sector, so overall, in the long run, there will be a benefit to the country.

The short-term is less fruitful however. Government spending cuts to any industry always results in unemployment. Although the unemployment will result from the relatively less productive sectors, for, without government assistance, they would never have emerged in the first place; their existence has crowded out more productive and independent private sector entrepreneurs.

TLDR: Not so good for short term as unemployment will increase. Good for long-term as the public sector will downsize, and the private sector will expand, resulting in an increase in the standard of living for all.

 

I think we should revert back to trading goats and sheep for everything. Things were much simpler back then. Your wealth didn't depend on a global economy, it depended on how many more chickens you had than your neighbor.