Contact Us

Beware: Fiscal Cliff Looms For U.S. Market

(Photo by Olivier Douliery-Pool/Getty Images)

As a country, we’ve done nothing to manage our debt the last couple of years.  In fact – we’ve added to it at a record rate.  Wall Street-”dooms-dayers” foretell of a fiscal cliff that the market is headed for.

The U.S. economic outlook for next year is being shadowed by what economists are calling the “fiscal cliff” of 2013 — the expiration of enormous tax cuts and transfer payments.

 

These fiscal stimulus measures — including the Bush-era tax cuts, the 2010-2011 payroll tax cut and extended unemployment insurance benefits — will expire at the beginning of 2013 unless Washington renews them. They amount to about 5 percent of the U.S. gross domestic product, according to calculations from Morgan Stanley. Taxes imposed by the “Obamacare” reforms will add to the fiscal punch.

Financial experts say that if this “fiscal cliff” is approached without serious strategies to correct our troubles, the country could be headed into another recession.

The last time the U.S. faced a fiscal cliff close to 5 percent of GDP was in 1969. Before the fiscal contractions set in that year, the real economy was expanding at an annual pace of 5 percent and the unemployment rate was below 4 percent.

By the end of 1969, however, the economy had entered a recession.

With 2012 a presidential election year – and a heated one at that – expect to hear a lot more about this growing crisis in the weeks and months to come.

But whatever ultimately happens, the uncertainty leading up to the resolution will likely keep investors and businesses on edge for the remainder of 2012, as they were during the debt ceiling debacle in mid-2011.

US Economic Outlook 2013 Heading Off ‘Fiscal Cliff’ – International Business Times.

More from KOOL 101.7

Best of the Web

Leave a Comment

It appears that you already have an account created within our VIP network of sites on . To keep your points and personal information safe, we need to verify that it's really you. To activate your account, please confirm your password. When you have confirmed your password, you will be able to log in through Facebook on both sites.

Forgot your password?

*Please note that your points, prizes and activities will not be shared between programs within our VIP network.

It appears that you already have an account on this site associated with . To connect your existing account with your Facebook account, just click on the account activation button below. You will maintain your existing profile and VIP program points. After you do this, you will be able to always log in to http://kool1017.com using your Facebook account.

*Please note that your points, prizes and activities will not be shared between programs within our VIP network.

Please fill out the information below to help us provide you a better experience.

Register on Kool 101.7 Radio quickly by logging in with your Facebook account. It's just as secure, and no password to remember!

Not a Member? Sign Up Here.

Register on Kool 101.7 Radio quickly by logging in with your Facebook account. It's just as secure, and no password to remember!