Ben Gardiner's Comm 101 Blog

United Staes President Barack Obama’s re-election puts him in one of the greatest economic turning points in American history. As the country faces a 13-figure federal budget deficit and an unclear energy future, the economic fate of the American Dream rests largely in the fiscal decisions of the Obama administration over the next 4 years.

After reading Frederick Wong’s blog post, I became very interested in this idea of what the media is calling a “fiscal cliff” representing “a combination of expiring Bush-era tax cuts [leading to tax increases], and [a] decrease in social services,” which would be implemented in an attempt to reduce the growing federal budget deficit. This impending crisis has caused anxiety for investors on Wall Street due to concerns regarding U.S. economic growth.

It seems to me that there is a growing disparity between what needs to be done and what the Democratic Party establishment would like to see implemented in government fiscal policy over the next 4 years. For example, President Obama’s proposed plan to strengthen public schools and create affordable Medicare for Americans is starkly contrasted with the pervasive need to reduce the federal budget deficit, especially if further increases on the federal debt ceiling are to be avoided.

I worry that many American businesses, especially small business, will be forced to shut down if this “fiscal cliff” theory proves true. Necessary tax increases and cuts to social services may lessen the federal budget deficit at the cost of preventing incentives for businesses to grow and invest; this will put America (and the rest of the world, for that matter) into a further economic recession, one which we may not be able to recover from.