There is no denying that Washington DC politicians are working hard to avoid coming to an agreement regarding the budget, deficits, debt, and policies. Last year’s stalemate over the debt limit was broken by an agreement that there would be cuts in spending as well as increases in taxes on January 1, 2013 unless both Houses came to an agreement. An agreement was not reached by a super-committee nor through legislation started in either chamber.
Ben Bernanke labeled the events to happen based on the debt limit agreement of 2011 as the fiscal cliff. The Congressional Budget Office labeled it as a fiscal slope. I believe this is a fiscal correction.
Media have hysterically given the perspective that Congress must do something now – in a lame duck session rather than wait for the new elected officials to be sworn into office. The Fox News group is clamoring for cuts. The MSNBC group is demanding tax increases for the wealthy.
Actually, does any of this really matter to most of us? Does it matter whether a 2% payroll holiday cut ends? Does it matter when we consider that the oil prices increased an equivalent dollar amount to the percentage of holiday payroll cuts? After the latest set of tax cuts, the oil companies took the money. If taxes rise then they’ll simply shift prices. The only way out is for someone to not use gasoline.