The document outlines 5 possible scenarios for how Congress may respond to the approaching fiscal cliff:
Scenario A has Congress passing a short-term stopgap deal to buy more time to tackle the problem in 2013. Scenario B has Congress unable to reach a deal, allowing the automatic spending cuts and tax increases to take effect. Scenario C finds a middle-ground compromise with some provisions expiring and tax rates increasing for high incomes. Scenario D is a "grand bargain" cutting the deficit by $4 trillion through historic compromises. Scenario E is a "down payment" of deficit cuts through a fast-tracked vote if no further action is taken in 2013.
Some thoughts on the state of the US economy and what we CAN all do about it - short of a Revolution....
We can all be successful as idividuals. We need to take control of our destiny!
The Myths & Realities Of Estate Planning 2009cpwalmsley
In this presentation I debunk some common misconceptions with estate planning. This knowledge and more is available to my clients. Audio will soon be added.
With interest rates rising, the debt ceiling looming once again, and high-profile issues like tax reform on the agenda, politicians in Washington are finding it harder to ignore the high and rising national debt. However, instead of addressing the issue openly and honestly, too many are resorting to myths to muddy the waters. We confront some of the most common myths with the facts.
Some thoughts on the state of the US economy and what we CAN all do about it - short of a Revolution....
We can all be successful as idividuals. We need to take control of our destiny!
The Myths & Realities Of Estate Planning 2009cpwalmsley
In this presentation I debunk some common misconceptions with estate planning. This knowledge and more is available to my clients. Audio will soon be added.
With interest rates rising, the debt ceiling looming once again, and high-profile issues like tax reform on the agenda, politicians in Washington are finding it harder to ignore the high and rising national debt. However, instead of addressing the issue openly and honestly, too many are resorting to myths to muddy the waters. We confront some of the most common myths with the facts.
What is the "fiscal cliff"? It's the term being used by many to describe the unique combination of tax
increases and spending cuts scheduled to go into effect on January 1, 2013.
* US Debts
* So what is the debt ceiling?
* Then what is the US debt ceiling?
* What would happen in the US defaulted?
* Goldman Sachs Analysis
* Stocks that could be affected
* What else could rattle equities?
The next President will need to confront a number of budgetary challenges and will likely sign into law many federal tax and spending changes. Yet too often, election campaigns are about telling voters what they want to hear rather than what they need to know. To separate fiction from reality, the new Fiscal FactChecker series will monitor the 2016 Presidential campaign on an ongoing basis. To start with, we have identified 16 myths that may come up during the campaign.
In the coming months and years, lawmakers will face a number of important budget-related deadlines, or Fiscal Speed Bumps, that will require legislative action. These Fiscal Speed Bumps will present challenges, risks, and opportunities. Addressed irresponsibly, they could cause serious disruptions and/or add as much as $3 trillion to the debt over the next decade above what current law would allow. But if dealt with thoughtfully, they offer an opportunity to pursue reforms that would grow the economy, improve the policy landscape, and reduce the risk of an uncontrollably growing national debt.
If Congress and the President cannot agree on at least short-term legislation funding federal operations, a government shutdown will result. This primer provides basic information to better understand what could happen.
Once again, the federal government is running up against the statutory debt limit, which has major implications for the national debt and the U.S. economy. Here’s a basic overview of this critical issue.
We debunk several common myths about the national debt. Like deficits are falling; there is no harm in waiting; deficit reduction will harm the most vulnerable; and the debt can be fixed by cutting waste, fraud or foreign aid.
The Fiscal Cliff and 10 Moves Every Investor Should Consider Making Now (...B...D.B. Geehan
Originally published Oct 2012 -- White Paper regarding moves every investor should consider making in the run-up to December 31, 2012 and the Fical Cliff.
The research paper is based on the US Fiscal Cliff deal, a the popular term to describe the expiry of tax breaks and introduction of spending cuts leading to conundrum that the US economy faced at the end of 2012
What is the "fiscal cliff"? It's the term being used by many to describe the unique combination of tax
increases and spending cuts scheduled to go into effect on January 1, 2013.
* US Debts
* So what is the debt ceiling?
* Then what is the US debt ceiling?
* What would happen in the US defaulted?
* Goldman Sachs Analysis
* Stocks that could be affected
* What else could rattle equities?
The next President will need to confront a number of budgetary challenges and will likely sign into law many federal tax and spending changes. Yet too often, election campaigns are about telling voters what they want to hear rather than what they need to know. To separate fiction from reality, the new Fiscal FactChecker series will monitor the 2016 Presidential campaign on an ongoing basis. To start with, we have identified 16 myths that may come up during the campaign.
In the coming months and years, lawmakers will face a number of important budget-related deadlines, or Fiscal Speed Bumps, that will require legislative action. These Fiscal Speed Bumps will present challenges, risks, and opportunities. Addressed irresponsibly, they could cause serious disruptions and/or add as much as $3 trillion to the debt over the next decade above what current law would allow. But if dealt with thoughtfully, they offer an opportunity to pursue reforms that would grow the economy, improve the policy landscape, and reduce the risk of an uncontrollably growing national debt.
If Congress and the President cannot agree on at least short-term legislation funding federal operations, a government shutdown will result. This primer provides basic information to better understand what could happen.
Once again, the federal government is running up against the statutory debt limit, which has major implications for the national debt and the U.S. economy. Here’s a basic overview of this critical issue.
We debunk several common myths about the national debt. Like deficits are falling; there is no harm in waiting; deficit reduction will harm the most vulnerable; and the debt can be fixed by cutting waste, fraud or foreign aid.
The Fiscal Cliff and 10 Moves Every Investor Should Consider Making Now (...B...D.B. Geehan
Originally published Oct 2012 -- White Paper regarding moves every investor should consider making in the run-up to December 31, 2012 and the Fical Cliff.
The research paper is based on the US Fiscal Cliff deal, a the popular term to describe the expiry of tax breaks and introduction of spending cuts leading to conundrum that the US economy faced at the end of 2012
Reduced Government Spending and Your InvestmentsInvestingTips
Interest on the national debt threatens to become a larger cost than other major parts of the budget. To the degree that belt tightening is chosen as a way to solve this problem, we need to look at reduced government spending and your investments.
https://youtu.be/1mLIFxWyATE
Investment Risks of a Debt Ceiling CrisisInvestingTips
Because of recurrent budget deficits the US Treasury (which sells securities) needs permission to borrow as the debt limit is a set number. In 2023 that debt limit will soon be passed and Congress will need to raise the legal debt ceiling or risk having the United States of America go into default on its debts. At Profitable Investing Tips we are concerned about investment risks of a debt ceiling crisis which is currently brewing.
https://youtu.be/kcde-tST7S0
Fears of the U.S. economy falling off a “fiscal cliff” have been percolating among investors, conjuring up frightening images of a deep recession. But the chances of it actually happening in its entirety are slim, say Allianz experts.
If the US has defaulted on its debts the government will not be able to step in and lend a hand. If that were to be the case, we could be looking at another Great Depression. The connection between a US debt default and your investments would be such that many would lose substantial portions of their portfolios.
https://youtu.be/AmJt2P6QHAw
1. SOME FISCAL CLIFF SCENARIOS
What could play out in the near future?
Presented by William J. Prentice II, AWMA, CFP®
Will 2013 be as severe as some economists think? The fiscal cliff is getting closer
and closer. How will Congress respond?
In the worst-case scenario, Congress argues and deadlocks. Tax hikes and roughly
$109 billion in federal spending cuts take a bite out of GDP and another recession
becomes a possibility.1
There are other possibilities, however. The fiscal cliff may yet be averted, or at least
we might back away from its edge. One of several scenarios might come to pass.
Scenario A: Congress buys time. Many analysts think this is exactly what will happen.
Congress is in a lame-duck session. The option for legislators to “pass the buck” may
prove tantalizing. So we could see a short-term, stopgap deal with the idea that the
next session of Congress will tackle the problem later in 2013. The debt ceiling could
be raised, and a “down payment” might be made on longer-term liabilities.1
Scenario B: Congress can’t make a deal.This may not be so improbable; if
youremember the “super committee” assigned to craft a deficit reduction plan in
2011, you will also remember thatit didn’t accomplish the set task. In fact, we are
facing the fiscal cliff because of that committee’s failure.2
The “fiscal cliff” already amounts to Plan B. When Congress and the White House
reached an accord to raise the debt ceiling back in August 2011, $1 trillion in federal
spending cuts were greenlighted and Congress was told to find $1.2 trillion more to
slash. As that didn’t happen, $1.2 trillion in automatic cuts are set to begin nextyear.
So Congress would actually be following federal law if it did nothing to respond to the
issue.2
Doing nothing seems unsuitable, but there is the risk that history could repeat itself.
Election outcomes may alter political assumptions and interfere with consensus. If it
looks like we will go over the cliff in the waning days of 2012, there is a strong
possibility that the incoming 113th Congress could vote quickly to reinstate select
spending levels and tax breaks. That might mute some of the clamor from global
financial markets.3
Scenario C: Middle ground is reached. Some degree of compromise occurs that
leaves no one particularly satisfied. Certain short-term provisions are phased out,
2. such as the payroll tax holiday, the recent increases for small business expensing, and
assorted tax credits and tax breaks for education. The Bush-era tax cuts are preserved
(at least temporarily) for the middle class, but rates rise for those making $1 million
or more per year. The clock turns back to 2009 with regard to estate taxes. The rich
face higher taxes on capital gains and dividends. Perhaps some defense cuts are
postponed.
Scenario D: The “Grand Bargain.”Congress and the White House boldly arrive at a
something more than an incrementally enacted deficit reduction plan. They reach a
“grand bargain,” a deal designed to cut the deficit by $4 trillion by the mid-2020s,
after historic, long-range compromises are made to reach stability on assorted tax and
spending issues. With a lame-duck Congress, this may be a longshot.1
Scenario E: The “Down Payment.”Legislators could always tear a page from another
playbook in trying to solve this problem.The Bipartisan Policy Center, for example,
thinks a “grand bargain,” or anything approximating a real deal on the fiscal cliff, is
unlikely given the short interval between the election and 2013. It recommends a
“down payment” of deficit cuts that could be approved by a fast-tracked simple
majority vote. If Congress didn’t take further steps to cut the deficit next year, then
certain tax breaks would disappear and cuts would hit social welfare programs
(excepting Social Security).2
Whatever happens in Washington, this is a prime time to consider financial moves
with the potential to lower your taxes and insulate your wealth. Explore the
possibilities before 2013 arrives.
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Citations.
1 - articles.marketwatch.com/2012-10-25/economy/34719282_1_fiscal-cliff-tax-cuts-defense-cuts [10/25/12]
2 –thehill.com/blogs/on-the-money/budget/262893-bipartisan-policy-center-floats-fiscal-cliff-solution [10/12/12]
3 - www.salon.com/2012/11/01/a_look_at_3_scenarios_as_the_fiscal_cliff_looms/singleton/ [11/1/12]
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