Monday, May 14, 2012

We're seeing the "Fiscal Cliff"

So it seems that we're standing at a sort of cliff of the fiscal kind.

I was chatting with one of the directors for the investment group within our larger group and were chatting up on my persistent investment account alerts and how I am watching things too closely--particularly the stocks that I recently acquired. I tell him his Bloomberg terminal looks very retro and the lines and colours on his dual monitors look really pretty.

During our conversation, the topic about macroeconomics and the very immediacy of it all is what makes it so exciting, came up. He said he loves watching the "soap opera of the world" unfold everyday... following the stupid and smart choices that governments, people and companies make. Me? I just panic about the drop in ~5% that my stock picks make. *sigh*

Today, I learned about the "fiscal cliff". This new term focuses around the $500 billion worth of tax cuts and spending boosts that are expected to expire at the end of 2012. According to my textbook, this was stuff that the Bush administration put together. And according to the same chapter (chapter 1), this whole thing was a total debacale. I can't believe how someone could suggest that you continue to spend money and permit tax cuts/credits yet take nothing in (i.e. taxes). There is no business I have ever heard of (even not for profits of charities) that run their organization as such!

It's not just the deficit that is the problem... but that they're not in a pickle and if they do increase taxes, they'll make consumers/people upset. If you don't, they'll go further into debt (we're talking in the trillions here).

Looks like the US government has a big dilemma ahead of them... but to say that we're not affected would be foolish. Afterall, the US happens to be one of our biggest consumers....

1 comment:

  1. big problems ahead!! sometimes feels like we're on the titanic!