Glaucon wrote:Really easy solution: the two parties simply have to agree, reach an agreement. Easy, right?
Anarch Allegiere wrote:As a Belgian I'd expect that it would be REALLY easy for them to get to agreements in a two party system, compared to here where there are usually 5 to 6 parties bickering and fighting over everything.
Kaitlin wrote:It really doesn't matter if they agree or not at this point. One thing is certain and that is the existing law is set to expire. I also don't buy into the argument the Bush era tax cuts alone will send the country back into a recession. That isn't what got us here in the first place. It is the same tax structure in existence during the most prosperous period in history.
(Guardian:) To understand the danger we may – or may not – be in, it's worth recapping exactly what the fiscal cliff is. The fiscal cliff is a problem of Congress's own making, which is not to say it will be one of Congress's solving.
In 2011, Congress passed the Budget Control Act. It was the seed of what we now call the fiscal cliff. Here's what to expect: shortly after 1 January, unless Congress intervenes beforehand, we'll see two things happen: $100bn of automatic spending cuts, along with the demise of a batch of tax cuts that have been a crutch for the weak economy – the Bush-era tax cuts that have kept taxes low for eight years; and Obama's 2% payroll-tax holiday.
Each of these separately – tax hikes or spending cuts – would not be enough to dent the US economy by much. But together, the spending cuts and the tax hikes are enormous. The Committee for a Responsible Federal Budget and the Congressional Budget Office both expect that a recession would immediately follow if Congress does not address the fiscal cliff.
The spending cuts, for instance, will add up to $100bn pulled out of the economy by the government, in everything from the defense budget to Medicare. The idea is to reduce the federal deficit by $1tn over 10 years. The tax hikes will return tax rates to what they were before 2003, which means the top tax rate for households could be over 39%, according to press reports.
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