Fiscal Cliff Predictions

Nothing very interesting will happen Jan 1. In December Congress will vote to delay the fiscal cliff for 6 months or so. They'll throw in some minor measures to make it look like both sides are doing something. The rest of the world will moan about the US being irresponsible (as they should) but the dollar will not collapse (yet).

Nothing much will happen. I don't think they will come up with a solution but rather a delay as suggested by the poster above.

Overall, if the tax cuts went into effect on Jan 1, the impact wouldn't be that big. There are major lobby groups campaigning and they suggest the world will come to an end but they just want to cover their a$$es.

So you are saying the Senate and the House will vote to extend all of the tax cuts, squash the spending cuts and raise the debt ceiling in December and the president will sign off on that.

Could be.

Similar to 2010.

But I don't think so.

2010 was different. The House change hands. The economy was weaker. And Obama had a re-election bid coming up.

They may sign something in December, but it won't be status quo.

And if things do go past Jan 1, there will be issues.

Look at last year when they waited to the last second to raise the debt ceiling, which didn't effect any cash flow but sent markets crashing and the US credit rating to go down.

It may not be terrible but there will be repurcussions.

There is a lot of heat on Republicans about their tax pledge.

There seems to be some ready to give in on letting the upper 2% cuts expire.

But Boehner is holding firm and conservative activists are threating those that vote to raise any rates.

X-Runner wrote:

http://www.cnn.com/2012/11/28/politics/cole-taxes/index.html?hpt=hp_t2http://www.foxnews.com/politics/2012/11/29/conservative-activist-reportedly-threatens-to-steer-donors-away-from-rnc-over/

There is a lot of heat on Republicans about their tax pledge.

There seems to be some ready to give in on letting the upper 2% cuts expire.

But Boehner is holding firm and conservative activists are threating those that vote to raise any rates.

A wise man on the right would recognize the need to do something about revenue, but on the condition that spending cuts also occur across the board and not just to the military.

We're not talking about wise men we are talking about congressmen.

What do you think they will do and when?

The best deal that can be made on the revenue and spending side is by letting the cliff happen. It will be much ado about nothing except it will actually have slightly substantive cuts. Any deal they will make will merely push much needed cuts way out into the future. 10 year budget projections and baselines are meaningless.

Any plan that passes the Senate will be moderate and contain all sorts of concessions to deficit hawks. If House Republicans are the only thing stopping a deal it will damaging to the party. The Boehner may not lead the charge to compromise, but also won't try to hold the opposition together with an iron fist. Some Republican votes will be won with the usual wheeling and dealing.

Negotiations don't seem to be going anywhere.

From the article:

While it had always seemed likely that the two sides would reach a stalemate before finally coming to agreement — as has been the pattern over the past two years — lawmakers and congressional aides tracking the back-and-forth said there’s a growing probability that no deal will be reached in time to avoid the fiscal cliff.

Boehner will not vote to raise taxes on the 250+.

Obama will not sign a deal that doesn't include rates going back up on the 250+.

If they can't come to agreement, the rates automatically go up on the 250+, along with everyone else.

Some Republicans will have to cross the line and go against Boehner to get any deal done in the next three weeks.

Otherwise, we go over on Jan 1.

I doubt Obama will back off.

He just won the general election and campaigned on that very point. He held that point in 2008 campaign as well. But now he has no re-election to worry about. He has no political risk.

Boehner campaigned on his point as well but didn't have an election involving the entire country and he still has to face re-election in two years.

I say we all fall off the cliff and then we can all pay our fair share.

I agree. It'd be great for our rigged income tax system to finally be made fair and have everyone pay the same %, regardless of income, rather than pushing 40% of the income tax burden on the top 5% and allowing the bottom 60% to skate.

I predict the assclowns you people elected - who are to blame for the "fiscal cliff" to begin with - will successfully blame the crisis on everyone but themselves. I also predict most people will be stupid enough to view the "fiscal cliff" as some sort of unpredictable tsunami that Barry is bravely fighting off, not as the trainwreck actually caused by barry & co.

I predict the elctorate will become even more illiterate, uninformed & short sighted and we'll continue to elect con-men like Barry until the whole thing implodes - at which point the Republicans & "the rich" will be blamed, of course..

One successful commodity trader's opinion:

http://www.uncommonwisdomdaily.com/why-you-could-see-some-special-dividend-payouts-this-month-15363

Defense cuts? Scuttle plans to build one damn super jet we'll never ever need and I'm sure that will help quite a bit and not be missed.

Warren Buffet is another successful trader ... and he has a different opinion.

My question is - what is YOUR opinion on what WILL happen?

Not what you think should happen or would like to happen.

Is Boehner going to keep the rates down accross the board?

His only chance for that is to get a deal done this month.

Will Republicans cave this month or are we going into January without a deal?

I don't understand Boehner's position. On the one hand he acknowledges that Obama WON the election with the pledge to up tax rates on those making $250,000 a year, and yet he appears not willing to allow that to happen. It's silly.

We are already starting to see some bad things from this...market dropped a bit, manufacturing in the US losing steam...this COULD be big trouble.

Buffett says that the US won't enter a recession even if we pass the fiscal cliff deadline, but I'm not so sure of that.

I DO wish that Obama would offer more in terms of cuts too though...he and the Democrats have offered more than the Republicans are insinuating, but I still don't think it's enough...we can cut things now, and then down the line when our fiscal house is in order a bit more, we can add some back; cuts and tax increases have to both be in play here.

Personally, I'm for Social Security and Medicare changes too. We live longer. It's silly to continue to allow Americans to take money disbursements out at the same ages as before (Medicare age should be raised too). They could tier it, but ultimately full Social Security Benefit retirement needs to be upped to 70 at least, and as we live longer and longer, that could be raised even from there. If people want to retire earlier than that, then they can invest for that.

Why should Obama offer more cuts? Republicans will reject ANY proposal. Let them counter offer and tell the American people exactly what programs they want cut. So far they have offered nothing.

it will be voted down at the very last minute, to keep people like you and I glued to the TV, great for advisers, ratings, etc etc....wait and see!

The R's will never negotiate a deal with the current Pres to his favor. Not even in this instance where the problem is of their own creation. Unless there's some way to bring legislation to the floor of the House to actually vote on, GOP leadership will gamble on going over the cliff. From now till then they'll be strategizing and message-testing the correct way to frame the result as an albatross for the White House, (i.e. it's no longer about the deficit or debt, it's now about the negative effect that austerity tends to have on aggregate demand).

[quote]lenny wrote:

Why should Obama offer more cuts? Republicans will reject ANY proposal. Let them counter offer and tell the American people exactly what programs they want cut. So far they have offered nothing.

[quote]

I'm looking to hire you as a consultant. You want $10,000 for the job, I'm offering $5,000. We both agree on the first $5,000 - so why don't you start working with that pay base, and we will talk about the next $5,000 "later".

If you don't agree to this, you're simply an obstructionist. Never mind that you have no guarantee of the next $5,000 and lose any bargaining ability.