Fiscal Cliff of 2012

Fiscal Cliffs and National Woes

There is a lot of debate about the best course of action for the nation as a whole and just how the government should address the financial concerns of it’s people. Should the government extend tax cuts for the top 2% of the nation to keep this valuable revenue stream? Should they let us all suffer a tax increase so all Americans share the burden? Or should they find a way to make everyone happy? Is that possible?

a concerned Barack Obama

President Barack Obama is at the center of turmoil concerning financial budgeting. | AP Photo

There is a saying that you can please some of the people some of the time, but you can’t please all of the people all of the time. The issue facing the United States at the moment is concern with the Budget Concern Act of 2011 go into effect. The Budget Concern Act is a collection of bi-partisan agreements meant to be painful enough for all parties and their constituents that congress would have to act to prevent ‘rioting in the streets’ as one opposed to the Act put it.

The budget act was put into place as a measure to pressure congress and law makers into action, but why is that necessary? Although it would be great to live in a democracy where discussions are focused, customary, polite and actually accomplish things, this was an election year and there was a lot at stake following the sweeping change that occurred when the Obama administration lost majority control throughout the arms of Washington. During the tumultuous months, many newly elected Republican representatives vowed to stop Democrat legislative progress and repeal the Health Care Act, affectionately named Obama Care.

All of this puts America on a precipice facing a very bleak start to the New Year. Without action by the government, the US economy and the driving forces behind it would experience some of the following:

  • End of the temporary tax cuts of last year, increasing taxes across the board by 2%.
  • Activation of Obama Care effecting businesses and individuals.
  • Hundreds of cuts (or reductions) in funding to several government programs and agencies.

What does this mean to you? How will you be impacted?

Update 1/1/2013: At 2 am on January 1st, the Senate finally came to a resolution, but this was not a final resolution. The cliff has been ‘postponed’ by two months.

About Kevin Williams

Kevin works as a independent consultant, helping people improve their financial situations. The author has a BS and Masters along with years of experience with credit cards, techniques for improving individual credit and life.

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