Cliff Resolved - Deficit Set To Explode
From Streettalk Daily X-Change
January 2, 2013 - 12:38am
In a stunning turn of events the Republican controlled House of Representatives passed the Senate's bill to raise taxes with no cuts to spending. In my post earlier today I detailed the various tax increases, and few spending cuts, that was passed by the Senate. I also stated that:
"There are two big issues with the current bill that will keep it from passing in the House without substantial amendments:
The cuts to spending are too small ($15 billion) relative to $620 billion in tax hikes over the next decade, and;
There are no measures to control future spending.
In its current form the deficit will increase in 2013 as higher taxes lead to lower economic growth. It is not just higher taxes on the "rich" but also on the middle class as the payroll tax cut expires leading to a 2% increase in taxes. The direct cost of the increase in payroll taxes will be roughly $125 billion equa...Continue reading this article »