On Jan. 1, 2013, last year’s agreement to extend the federal debt
ceiling kicks in. That means a 2 percent across-the-board reduction in
spending, along with an end to Bush-era tax rates.
Assuming the US economy keeps growing, the result will be a dramatic closing of the federal budget deficits that have exploded in the last decade. Unfortunately, as we’ve seen with Europe’s slide into recession, the more likely outcome of such a “fiscal cliff” is a sharp drop in growth.
And the result could well be an actual widening of deficits as Uncle Sam’s tax receipts drop sharply.
By this time, even the densest politicians must have realized the failure of such austerity measures in Europe and that the resulting recessions have triggered massive turnover in governments.
In fact, with most countries on the Continent either in recession or headed for one, odds are the political carnage is far from done.
Read more: http://www.investingdaily.com/15470/in-defense-of-dividends
Assuming the US economy keeps growing, the result will be a dramatic closing of the federal budget deficits that have exploded in the last decade. Unfortunately, as we’ve seen with Europe’s slide into recession, the more likely outcome of such a “fiscal cliff” is a sharp drop in growth.
And the result could well be an actual widening of deficits as Uncle Sam’s tax receipts drop sharply.
By this time, even the densest politicians must have realized the failure of such austerity measures in Europe and that the resulting recessions have triggered massive turnover in governments.
In fact, with most countries on the Continent either in recession or headed for one, odds are the political carnage is far from done.
Read more: http://www.investingdaily.com/15470/in-defense-of-dividends
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