Fiscal Cliff

Treadmill

Could somebody explain the impending 'fiscal cliff' in the US to me ?

In simple terms please I have googled it and am none the wiser.

CLAPTON

In simple terms

unlike the UK, America often pass laws with a 'die by date'
i.e. they pass a law that runs out at a certain time; in this case 1st jan

so unless the law is renewed, the law lapses

there are two such laws
- a tax cut runs out which means unless renewed taxes will go up for virtually everyone
-certain spending must be cut




probably a good idea

HAMISH_MCTAVISH

Treadmill wrote: »

Could somebody explain the impending 'fiscal cliff' in the US to me ?

Unless the Republican controlled House of Representatives, AND the Democratic controlled Senate, AND the President can all agree a compromise on taxes and spending by Dec 31st then some fairly hefty spending cuts and equally hefty tax rises will go into effect on Jan 1st.

Which if allowed to continue for any length of time would kill the emerging US economic recovery, and quite possibly plunge the global economy back into recession.

On a one to ten scale of serious SHTF economic events with the potential to hurt most of the economies on the planet, this would be in the 8-9 range, which is why it's newsworthy all over the globe.

However no matter how absurdly partisan American politics can be, and no matter how much irresponsible brinksmanship and posturing they indulge in, nobody really thinks they'll be stupid enough not to find a compromise either by the deadline or shortly afterwards, so nobody is really panicking about it yet either.

Treadmill

Thanks for the explanations, interesting stuff.

The_White_Horse

seems like the "fiscal cliff" is actually a good idea and needs to be fallen off.

wymondham

The_White_Horse wrote: »

seems like the "fiscal cliff" is actually a good idea and needs to be fallen off.

is it good to fall off cliffs?

MacMickster

wymondham wrote: »

is it good to fall off cliffs?

Maybe TWH, as an advocate of falling off cliffs, would like to make it his new year resolution to give it a go.

Having said that, it can't be the real TWH advocating tax rises (even if in the USA) can it?

Whilst undoubtedly, both here and in the USA, spending needs to be cut drastically while taxes need to be increased, this needs to be done in a controlled way. Rather than a cliff, I prefer to think that we are facing a high speed car crash. I would rather that we weren't, but if it can't be avoided then I would prefer it to happen in the most controlled way possible - in a car with high NCAP rating, seatbelt and airbags. The fiscal cliff approach is more akin to riding a motorbike without helmet or leathers at 100mph straight towards a concrete wall.

BertieUK

CLAPTON wrote: »

In simple terms

unlike the UK, America often pass laws with a 'die by date'
i.e. they pass a law that runs out at a certain time; in this case 1st jan

so unless the law is renewed, the law lapses

there are two such laws
- a tax cut runs out which means unless renewed taxes will go up for virtually everyone
-certain spending must be cut




probably a good idea

Now 'die by date' laws would appear to be a good idea because here in the UK we have so many laws that are outdated and would cost a fortune to change that could this be an idea that we may adopt?

CLAPTON

BertieUK wrote: »

Now 'die by date' laws would appear to be a good idea because here in the UK we have so many laws that are outdated and would cost a fortune to change that could this be an idea that we may adopt?

yes, I'm in favour of die by dates ; the only one I know of is the armed forces acts that needs renewing each years (UK law doesn't allow a standing army)

but it would be good if all laws only had a limited life span and then we could evaluate them properly and simply let them lapse if they are considered rubbish.

MacMickster

BertieUK wrote: »

Now 'die by date' laws would appear to be a good idea because here in the UK we have so many laws that are outdated and would cost a fortune to change that could this be an idea that we may adopt?

We do use this at times in the UK. We generally refer to it as a "sunset clause". They tend to be used for contentious/emergency legislation (such as anti-terrorist laws allowing suspects to be held for longer than normal without charge) or where ideas are being trialled through statute (the Scottish parliament's minimum pricing for alcohol legislation).

PaulF81

Ask this man. He knows so much about cliffs they named him after one.