Monday, December 10, 2012

Like bungee jumping... without a rope

If you read my blog post about sequestration, you learned about a major election issue that many people haven't heard of.

Except you HAVE heard of it.

It's now known as "the fiscal cliff."  And if you haven't heard about this over the past month, here's what you're missing (it's a 7 minute video, but very informative and pretty interesting):

But the problem of the fiscal cliff isn't one that will be easily solved, and it's pretty alarming.  People are getting nervous... and I talked to two of them.

Walt Montgomery lives in Ridley Park, Pennsylvania.  He's 23 years old and recently unemployed, but searching for a job within the Republican party. He's concerned that going over the fiscal cliff could mean a huge tax burden for him and his parents, which could make finding a job more difficult.

"Fewer employers will be hiring if they fear that their taxes will also be going up," said Walt. "Or if I do find a job I'll see more of my paycheck get eaten up by taxes which means less money to pay for other necessities."

Tracy McMahon, a Democrat from Baltimore, Maryland, is also concerned about the so-called fiscal cliff, but for a very different reason.

Tracy had been dragging her feet on investing money towards her 4-year-old son's college fund.  Now that she's educated herself about investing, and with the impending sequestration, she thinks she'd better wait.

While Walt and Tracy might not see eye to eye on how to solve the problem, they both think going over the fiscal cliff is a "huge possibility."

"I don't have a whole lot of faith that they'll reach a middle ground," said Tracy.  "Our political world has just become a huge hot potato game, pointing blame at each other based on a small portion of party beliefs on both sides."

Walt attributes this blame game to a divided, and increasingly partisan, government.  He says unless President Obama takes the lead, Congress won't be able to divert the disaster.

"The President has said he is willing to compromise, but he has refused to agree to entitlement reform," said Walt. "And the cuts in spending he is proposing is not enough to reduce either the National Debt or the budget deficit."

But Tracy isn't content with that explanation alone.  "I feel like the Republican Party wants to blame the President for the state of our economy."

So what is there to be done?  Walt said it boils down to compromise.  He suggested federal spending should be cut first, followed by a tax increase on those making over $1 million a year.  Tracy leans toward's Obama's proposal, keeping cuts for the middle class, but not for the wealthy.

What do you think?  Are you concerned about the fiscal cliff?  How would it affect you?  Are you a "Walt" or a "Tracy"?  Keep the conversation going in the comments section below!

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