The Great Fiscal Cliff of 2012-2013

Watch out for January 1, 2013 (just 127 days from today) when more than $1.6 trillion will be sucked out of the U.S. economy. The Bush tax cuts will end and the largest tax hikes in history, plus the largest spending cuts Washington has ever seen will take effect on New Years’ Day.

America will stand at the brink of a fiscal cliff so huge that it threatens to crush our economy and leave the stock market in smoking ruin. That would cause our already high unemployment rate to explode higher. This will drive millions of Americans into poverty.

The International Monetary Fund, the U.S. Congressional Budget Office, the Federal Reserve, the U.S. Department of Defense, JPMorgan Chase, Bank of America, and Goldman Sachs, plus armies of U.S. senators and congresspeople in both major parties and many leading economists all unanimously agree that this crisis could destroy what’s left of the economic recovery.  Another Great Depression would likely result.

Our hopelessly deadlocked Congress has failed to develop a plan to avert the crisis. Even if they delay some of the spending cuts and tax hikes, there is a potential problem looming that may make matters worse:

Nearly $1 TRILLION per year in fiscal and monetary stimulus will end.  Or will it? Fed Chairman Ben Bernanke has hinted that QE-3 may be on the way. Which means, the presses at the Fed could be printing more money which would devalue our dollar even further.

Although it is true that President Obama is not solely responsible for this mess we find ourselves in, he has failed to reverse or slow this trend.  Can we stand 4 more years of this kind of polices, or do we need a change?

Samuel Burns