Fiscal Cliff
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- Category: Politics: Economics
- Date Submitted: 12/11/2014 05:43 PM
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Fiscal Cliff
The Fiscal Cliff is the term used to describe the huge tax increases of about 500 billion dollars and spending cuts of about 200 billion dollars that the government will have to do if they do not decide on a deal by the end of 2012. If a deal is not made by the end of the year that the US will fall into a massive recession and it will be quite challenging to get out of. The reason this exists in because of the budget control act in 2011. There are two ways to solve the fiscal cliff problem, make a deal including large increases taxes or large spending cuts.
If the government chooses to solve the fiscal cliff by raising taxes they could just extended George Bush’s 2010 tax cuts, but if they did this they would have to deal with the fiscal cliff again whenever the deal expires. The way raising taxes would solve the problem is that it would bring in more revenue so that the spending and the revenue are closer together. This would not be the best way to solve the fiscal cliff because it would increase taxes on everyone, even the people that now can barely pay them or already cannot. A Better way to solve the cliff is to cut spending.
Cutting the government spending will solve the fiscal cliff because the government already spends way too much money on programs that really don’t need as much money as they are getting now. Also spending cuts will not affect the American people like raising taxes will. Spending cuts will just affect the government while the tax increases will affect every single person. Spending cuts is a better idea because of the long term effects on the economy and how they people will spend their money would be not as drastic as it would be if there were massive tax increases.
So as you can see concentrating more on spending cuts would be an easier and safer way to solve the fiscal cliff. The plan that would be very likely successful is to have some major cuts to spending and some littler cuts and maybe, if needed, have...
The Fiscal Cliff is the term used to describe the huge tax increases of about 500 billion dollars and spending cuts of about 200 billion dollars that the government will have to do if they do not decide on a deal by the end of 2012. If a deal is not made by the end of the year that the US will fall into a massive recession and it will be quite challenging to get out of. The reason this exists in because of the budget control act in 2011. There are two ways to solve the fiscal cliff problem, make a deal including large increases taxes or large spending cuts.
If the government chooses to solve the fiscal cliff by raising taxes they could just extended George Bush’s 2010 tax cuts, but if they did this they would have to deal with the fiscal cliff again whenever the deal expires. The way raising taxes would solve the problem is that it would bring in more revenue so that the spending and the revenue are closer together. This would not be the best way to solve the fiscal cliff because it would increase taxes on everyone, even the people that now can barely pay them or already cannot. A Better way to solve the cliff is to cut spending.
Cutting the government spending will solve the fiscal cliff because the government already spends way too much money on programs that really don’t need as much money as they are getting now. Also spending cuts will not affect the American people like raising taxes will. Spending cuts will just affect the government while the tax increases will affect every single person. Spending cuts is a better idea because of the long term effects on the economy and how they people will spend their money would be not as drastic as it would be if there were massive tax increases.
So as you can see concentrating more on spending cuts would be an easier and safer way to solve the fiscal cliff. The plan that would be very likely successful is to have some major cuts to spending and some littler cuts and maybe, if needed, have...