Tag Archives: fiscal cliff

The “Fiscal Cliff” is Really a Slope

I wrote earlier about how the “Fiscal Cliff” is a bad name for it. It’s really a slope, albeit one with increasing steepness. Unless fear turns it into a chasm.

This is from the Associated Press:

“If New Year’s Day arrives without a deal, the nation shouldn’t plunge onto the shoals of recession immediately. There still might be time to engineer a soft landing.

So long as lawmakers and the president appear to be working toward agreement, the tax hikes and spending cuts could mostly be held at bay for a few weeks. Then they could be retroactively repealed once a deal was reached.

The big wild card is the stock market and the nation’s financial confidence: Would traders start to panic if Washington appeared unable to reach accord? Would worried consumers and businesses sharply reduce their spending? In what could be a preview, stock prices around the world dropped Friday after House Republican leaders’ plan for addressing the fiscal cliff collapsed.”

 

 

Fiscal Cliff Talks Underway; Both Sides Upbeat

Negotiations on the Fiscal Cliff have started, and both sides are sounding positive. According to the Washington Post:

The four Republican and Democratic leaders of the House and Senate were unanimous after the initial round of talks in saying they were confident that they and the White House could agree on measures to raise federal revenue and cut spending before a Jan. 1 deadline, when draconian provisions originally designed to force a compromise are scheduled to take effect.

The stock market was cheered by the positive tone of the news, with the S&P 500 index closing up by half a percentage point today, after having trended downward since the election on November 6.