Thursday, November 29, 2012

Morning Joe: Fiscal Cliff Likely To Happen

Expressing extreme gloom over any prospects for a deal being done in time to avert the fiscal cliff, economic expert Steve Rattner said "This is not a deal you can get done at the last minute," after Christmas, for example. "Nothing good is happening", complained Rattner.
Reporting increasing gloom amongst economic experts and “no progress” in achieving any deal between Republicans and Democrats on the Fiscal Cliff, Steve Rattner said on Morning Joe today:
“I think the mood right now among people like Erskine Bowles, who pay close attention to this, is we have a very, very reasonable chance of going over this cliff. Every hour is ticking by. Every day is ticking by. This is not simply buying a house. This is not a deal you can get done at the last minute. And nothing good is happening.”
Earlier, Bowles, a co-chair on the Simpon-Bowles commission, had reiterated his own pessimissm about any plan being done to avoid what is called the fiscal cliff:
“We have a real crisis, and I think it would be insane to reach the fiscal cliff, but I think that there’s only a one-third probability of Congress getting something done before Dec. 31.”
The “fiscal cliff” is an automatic series of large budget cuts and tax increases which will occur, if Congressional negotiations over a debt reduction package don’t result in an agreeement by the end of the year. Democrats have demanded Republicans agree to revenue increases, including tax rate increases for wealthy Americans. Republicans have demanded Democrats include cuts to programs such as Medicare and Social Security.

While Democrats have offered a plan that focuses on increasing revenues, so far Republicans, who have offered no competing plan in the negotiations, remain obstinate in their usual anti-tax positions, much as they were in the summer of 2011, when the initial failure of Congress to reach a deal on raising the debt limit for the government, cost the USA its AAA credit rating. Because of the failure to see any progress, the gloom in Washington and in the business community is increasing.

Many corporations report holding back on expansions and new hiring, citing the growing economic uncertainty generated by Congress’ inability to forge any compromise over the budget.

Most experts believe going over the fiscal cliff will drive the USA back into a deep recession, with a big increase in unemployment, perhaps for as long as two years. Some economists have asserted the fiscal cliff might be the only way to obtain any serious debt reduction in the current situation, and that once the negative impact is weathered, the economy should improve with a much better financial future insured for the federal government.

Of course the "negative impact" includes sacrificing millions of American families, as jobs are once again lost in large numbers all over the USA.

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