Debt Ceiling

AKA "Fiscal Cliff"

Quick Explanation of the Fiscal Cliff

(Baker)
The "Fiscal Cliff" Explained In 60 Seconds

The "Hurricane Sandy" of the U.S. Economy

Forbes.com tells us to "Think of it as the economic version of Hurricane Sandy" explaining how death is a very real possibility, not only from the actual hurricane, but from the fiscal cliff as well.
Big image
(Beck)

December 15, 1995 Government Shutdown

Democrats & republicans couldn't agree on a final budget. (wallstreetdaily.com)

January 1, 2014 Government Shutdown

Budget deficit was rising too quickly, while public spending (equaling taxes) was increasing too slowly. (Fieldhouse)
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(Beck)

Republican Plan

  • $800 Billion tax increase over 10 years
  • Curb unspecified tax


Photo credit: http://www.yanceycountyrepublicanparty.com/

Obama's Plan

  • Increase tax by $1.6 trillion over 10 years
  • Return to Clinton-era tax levels: 36% (lower class) and 39.6% (upper class)
  • Return estate tax to 2009 level


(How the Obama and Republican 'Fiscal Cliff' Plans Differ)

Photo credit: http://commons.wikimedia.org/wiki/File:President_Barack_Obama.jpg

Impact of going over the Fiscal Cliff

  • Cheaper gasoline
When budgets are tight, people drive less, decreasing the price of gasoline to around $2 per gallon
  • Longer waits at airports
Fiscal cliff could cut airport staffing, delaying flights
  • Pricier groceries
Congress has yet to pass new farm bills. Without one signed by January 1st, policies revert back to the Agriculture Act of 1949
  • Bigger retail discounts

Falling consumer confidence would nudge retailers to offer more enticing deals
  • Riskier foods and drugs
Inspectors have less and less time per inspection. Fiscal cliff would limit the agency’s efficiency



(Grant)