Nov
18
United States: Fiscal Cliff
Posted by: Kevin Yu | November 18, 2012 | Leave a Comment
After Barack Obama regained his position as the President of United States of America for four more years , one major concern remains in its citizen’s mind: Fiscal Cliff, or as many say “Taxmageddon”. Everyone says “Fiscal Cliff, Fiscal Cliff”, but do they really know what it means and how it will affect the economy? Because US dollar is commonly used as the world’s mainly tradable currency, the effect of Fiscal cliff on United States will disperse throughout the world like wild fire. Consequently, it is crucial to know what really fiscal cliff is, and how it will affect each and every one of us.
Fiscal Cliff is the action that will be enforced by U.S. government on its people at the end of 2012 or beginning of 2013, regarding the Budget Control Act of 2011. In short, fiscal cliff means that the tax would accumulate, specifically more in wealthy sector, and government spending would significantly decrease. This act was introduced to diminish the ever-growing debt of U.S., which currently stands at approximately 16.2 trillion dollars.
The decrease in government spending would slow down U.S’s economy, which further decreases the economic activity of the world. The bond prices are expected to decline, as interest rates for 10-year treasury bonds decrease. It would be interesting to see if comprise would occur, which would affect the volatility of the outcome.
https://www.youtube.com/watch?v=7NtFgqzNWzg&feature=fvst
Sources Cited
Hall, Ed. “U.S. National Debt Clock.” U.S. National Debt Clock. N.p., 15 Nov. 2012. Web. 18 Nov. 2012. <http://www.brillig.com/debt_clock/>.
Kenny, Thomas. “What Is the Fiscal Cliff?” About.com Bonds. N.p., n.d. Web. 18 Nov. 2012. <http://bonds.about.com/od/Issues-in-the-News/a/What-Is-The-Fiscal-Cliff.htm>
Zukoski, John M. “Will President Obama Save Dublin, CA From the Impending Fiscal Cliff?”Articles on ‘Fiscal Cliff’. Around Dublin, 6 Nov. 2012. Web. 18 Nov. 2012. <http://www.arounddublinblog.com/tag/fiscal-cliff/>.
Video Credits
WikiPlays. “United States Fiscal Cliff – Wiki Article.” YouTube. YouTube, 10 Sept. 2012. Web. 18 Nov. 2012. <https://www.youtube.com/watch?v=7NtFgqzNWzg>.