Kicking off the week
Burdens Of Fiscal Cliff Will Be Carried By Middle Class
No matter which party will receive the blame if the fiscal cliff is not avoided, one thing is certain – the middle class will be footing the bill. In fact, many families will see their taxes rise by $3,700 as a result of the alternative minimum tax (AMT).
In Mexico City, the uncertainty concerning the fiscal cliff was one of the many issues being discussed by G-20 finance ministers. In addition to questions of how to deal with the financial crises in Spain and Greece, there were preparations for another new year deadline – implementing bank regulations passed as part of the Basel III reforms.
As many as 200 people were killed in air strikes launched by Bashar al-Assad’s forces on Damascus. Meanwhile, opposition groups continue their four-day meeting to identify and coalesce around a platform and hopefully a new leadership.
Global Impact Of US Elections
The Tuesday elections will have an impact on the direction in which the nation moves in the next four years, but it will also affect and shape events in Syria, relations with China and how intently the US engages the world on climate change.
Is “Uncertainty” Merely A Financial Buzzword?
No, according to a new paper by American Enterprise Institute scholar John H. Makin, the policy and economic consequences of continuing uncertainty in fiscal and monetary policy needs to be understood (and considered) by policymakers.
“Uncertainty causes households and firms to delay decisions until the uncertainty is resolved or at least substantially diminished. Symptoms of responses to elevated uncertainty include reduced levels of spending on goods and services by households and reduced levels of investment and hiring by firms,” he writes.
Furthermore, if uncertainty remains in the coming year, Makin asserts, “there is little doubt that an uncertainty-induced global recession will occur. Whoever is elected president must understand this and induce Congress to follow a path to lower tax rates paid for by a simpler, less uncertain tax code.”