Saturday, November 17, 2012

Small Fiscal Cliff : US to Offer Smaller Package of Tax Increment & Expenditures Cut

According to Bloomberg and other news sources, the discussions among President Barack Obama and congressional leaders brought new lights for the economy namely the fiscal cliff. Both side described the meeting as "constructive" and they have a fallback plan if their discussions do not meet an agreement.

News Excerpt from SfGate.com:

Participants in financial markets think it’s almost impossible that the negotiations will fail and that the U.S. will go over the fiscal cliff, said John Engler, president of the Washington-based Business Roundtable, an association of chief executives of large corporations.
Fallback Plan according to Bloomberg:
Several congressional aides have suggested that in the event talks fail, both parties in Congress are discussing fallback plans for $60 billion to $100 billion in deficit reduction to replace automatic spending cuts set to take effect in January.

Summary from SfGate Bloomberg News:
Nov. 16 (Bloomberg) -- House Speaker John Boehner offered a “framework” including new revenue to reduce the U.S. budget deficit during talks with President Barack Obama and Congress leaders on averting a year-end fiscal crisis....“My hope is that this is going to be the beginning of a fruitful process where we’re able to come to an agreement,” Obama said in his opening remarks today.

So, there are Plan A, Plan B and even a Plan C. I think that the market will be very happy to hear this and stock market might go back up again. In addition to fallback plans, they also talked about creating new revenues stream to reduce the deficit.

What do you think? Well, personally I feel that it is a "POSITIVE" news for the economy because fallback plans are ready and new revenue streams will be created if they agree to do so. I think that the economy will be stronger and getting over "Fiscal Cliff" will not be a problem for US.
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