December 21 2012
Did the Economic World End?
The world didn’t end with the end of the Mayan calendar, but it almost seems like lights out for hopes of averting the fiscal cliff.
Last night, Speaker Boehner called off the vote on the Plan B to extend taxes for everyone making below $1 million per year. So what’s next for the negotiations? No one knows the answer, beyond that Representatives were told they would have 48 hours notice should a deal be brokered and a vote scheduled.
So did the economic world end today? Are we destined to hit the fiscal cliff? No way. In fact, Republicans inability to unify a caucus in support of the Speakers compromise demonstrates that the President has to come back to the table.
And even if a deal is less likely today than it was yesterday, that’s far from the end of the world. Don't get me wrong, going over the fiscal cliff will harm markets, create more economic uncertainty, stunt any job creation we have mustered, lead to the consideration of our credit downgrading, and miss an opportunity to instate meaningful structural reforms.
However, the fiscal cliff's deadline is not as hard as many in the media have made it out to be. Yes, tax cuts expire on December 31, yet many Congress' have passed them retroactively. Furthermore, the sequester does not go into effect until mid-January, and a few weeks can make a big difference on the Hill.
Nearly 80 percent of Americans are concerned about the fiscal cliff, as they should be. However, save the end of the world parties -- we're not there yet.