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More Fiscal Cliff Notes

BLOG, MARKETS & ECONOMICS, TAXES  |  7 Dec 2012

More Fiscal Cliff Notes

By now you have to believe that everyone is tired of hearing about the “Fiscal Cliff”. We know there is a good chance that this will drag on well beyond the New Year and the effects will likely impact almost everyone in some way. However, the media has really pumped this up into almost an “Armageddon” type scenario. True, there will be some ill effects on the economy and probably the markets as well if a deal is not reached soon, but this has a lot of the ear markings that the Y2K scare had back in 1999. And if I recall correctly, we managed to live through that crisis and we will live through this one as well.

For the most part, I want to keep this post more on the lighter side and post some observations and notes regarding the Fiscal Cliff that might lighten the mood a bit.

Fiscal Cliff Tax Calculator

First, though, The Washington Post has a wonderful “Fiscal Cliff” calculator and what the effects will likely be for you. You just click on a family type and select a number that is close to your expected income and it shows you an approximate change in your taxes next year under a.) the Democratic proposal, b.) the Republican proposal or c.) going over the cliff and the expiration of the Bush Tax Cuts. The data was compiled from the Tax Policy Center. If you click on the Tax Policy Center link, there is a more detailed version of the calculator you may also find interesting.

Fiscal Cliff Calculator

Those Annoying and Wrong “Fiscal Cliff” Countdown Clocks

Barry Ritholtz, on his excellent blog, The Big Picture discussed the idiocy of those countdown clocks that CNBC displays on the television screen and Marketwatch always prominently displays on their website. Besides being annoying and fear mongering, they are essentially inaccurate in their countdown. The reason being, is that they are counting down to December 31st, when really the last day a bill can be introduced to Congress before adjourning for the year is December 18th. Congress is expected to wrap things up for the year on December 21st. But, a more important date, may actually be December 17th when the President and his family embark on their annual family vacation in Hawaii.

So, when you think about it, if they want an accurate “Fiscal Cliff” countdown clock they should use December 17th or 18th. Actually, I would be much happier if they just scrapped the clocks altogether, but I don’t see that happening. Do you think an alarm is going to go off when those clocks reach zero?

Warren Buffett on How to End the Deficit

“I could end the deficit in 5 minutes,” he told CNBC. “You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting member of Congress are ineligible for re-election.”

I would look forward to seeing that bill work its way through Congress!

No Holiday Photo for Obama and Boehner

Apparently at a recent White House holiday event, House Speaker John Boehner and President Obama did not get together for a holiday photo like is often done. Apparently these guys aren’t best buddies anymore?

The Onion’s take on the Fiscal Cliff

The Onion , which provides a humorous side to current events, has their own take on what will happen if we go over the fiscal cliff. US Headed For Fiscal Cliff

‘Twas the Night Before The Fiscal Cliff
Here is a Christmas themed version of the Cliff. ‘Twas the Night Before The Fiscal Cliff

Political Cartoonists are Having a Field Day!

 

And Finally, My Favorite

So, the days tick by and we get closer to year end but it is still anybody’s guess as to what the final outcome will be. As each day goes by we are closer to not having a resolution by year end. So, it is likely we will go into 2013 without a deal in place, but I am confident that something will get done in the first few weeks of 2013. Like Y2k, the world will still be standing on January 1, and it will be easy for them to make most tax provisions retroactive to the beginning of 2013. Sure, there is likely to be some increases in taxes for most people, but I think most agree that this is a needed measure to start the process of getting a handle on our national debt problem.