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The 2012 Fiscal Cliff Simplified

For a college student and aspiring scientist, the talk of the 2012 fiscal cliff can be overwhelming underwhelming. Why should a college student or future scientist like me worry about the fiscal cliff? Should I worry about the price of Raumen noodles and milk suddenly inflating to $8 a gallon, or should I kiss my research funding goodbye…

 

The 3 W’s of The Fiscal Cliff

What will happen?

The Fiscal Cliff is a sharp decrease in federal expenses that is predicted to cause a mild recession in 2013. The two factors leading to the fiscal cliff are:

  • Bush Tax Cuts expiring at the end of 2012
  • Budget Control Act that allowed the US government to go further into debt (debt ceiling) until January 2, 2013.

Fiscal Tightening Simplified

Who is the cause & Who can stop it?

Below is a chart of the money taken in and money spent by the US government since 1971. I’m not an economics expert but the  major problem with the budget began during George W. Bush’s term in 2001 and continuing through Barack Obama’s 1st term as brought the economy out of a recession . I’m not pointing the finger at anyone, but  the problem lies in increasing deficits each year since Bill Clinton left office.

President-Budgets-crop

When is the Fiscal Cliff Deadline?

The major deadline is for the Budget Control Act which is January 2, 2012.

What Notable Programs Will Be Safe

  • Medicaid
  • Social Security
  • Federal Employees such as the Military

What Notable Program Wont Be Safe

unsafe-programs
Rover credit NASA, Milk credit Gizmo1408
  • Federal Agencies and contractors such as NOAA (weather satellites), NASA (leading space exploration) and the TSA(airport security)
  • Farmers: The Farm Bill was attached as extra incentive. If the farm bill can not be passed there will be no crop insurance to many farmers. This will inflate crops prices.
  • Defense Budget

 

 

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