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.
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.
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
- Social Security
- Federal Employees such as the Military
What Notable Program Wont Be Safe
- 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