The Fiscal Cliff for dummies

Can someone explain it in simple, easy to understand terms? I know it involves the end of the Bush tax cuts and I think something to do with sequestration (which I believe means cutting the defense budget). Does it also involve the debt ceiling?

• It must be bad, my pop sold all stocks he had in a defense company he use to work for ages ago that he held for over 50 years. It split a gazillion times over, over many years too and had paid good dividends. He sold two months the election and is good at reading and making money on the market.

• Let me guess, this thread is where our lurking freeper is waiting to lay down their bullshit. Save it.

• It's just some rightwing bullshit, so they can push Obama to slash everything in the govt (except the military) and have everyone living in the streets and eating out of garbage dumps.

• OP, I hope this helps a little.

  http://www.forbes.com/sites/rickungar/2012/11/10/the-fiscal-cliff-explained/

• That troll, the one who keeps saying he's going to have to sell his business...he'll be here any minute.

  %28What%20business%20is%20that%3F%29

• It means taxes will go up, spending by the government will go down slightly and we all get fucked.

• Oh, good. I can hardly wait for the next installment from Mysterious Business Troll.

• Bush tax cuts expire. Payroll tax reduction expires. Failure to hammer out certain budget issues means automatic BIG spending cuts on Jan. 1. ALL of this happens at the same time. Without remedy (extending the Bush tax cuts to some or all, extending the payroll tax, for example), households could be paying $2000-$3000 more per year in taxes. A shit ton of money is taken away from consumers and, arguably, out of the economy (since I doubt most household were saving that money previously).

• Basically, Congress set up an event so horrifying that it would force a joint committee to devise an alternative, and that committee was unable to reach an outcome.

• r1, your Dad's capital gains taxes are going to be killer. If he was just living off the dividends I am surprised he sold out. Sounds like more of a knee jerk reaction. We've been at this fiscal cliff before.

• R10, I don't know the fine details but he has said he made sure it's offset by some losses. He doesn't make knee jerk decisions and I do know he never lived off dividends but always invested them back in but who knows, he's pretty up there in years. He tends to look towards new opportunities but is pessimistic and in wonder the last some years saying the market no longer reflects any reality. He studies endless charts, numbers and eveything about it. It's his religion. His advise to me is today in order to make money in this market, you have to be on it trending it working it everyday all the time hands on and not give that responsibility over to another. He's done well but I lucked out in not having any brain for it. I'm just lucky in not having to worry about financing my folks final years. Knock on wood. I'm just glad for that.

• You really are wasting your time, op. You have nothing to say of any consequence. Freepers are the b-EST liars, especially to themselves. No one cares about racists or facists who throw shit fits when their tax holiday ends. It was a mandate. You guys are dead and defeated. Your ideas are bullshit and everyone knows it. That's one of the greatest things about this election was all the fact-checking that went on to call you guys on your shit. You have zero, nada, nothing. You are a boogeyman, a phantom. You have no power of fear over anyone.

• Thanks for the post, r11. I think it is best to have an asset allocation plan and put everything in a few total market index funds and a money market fund and be done with it. I like to keep it simple.

  r9

• [quote]You have zero, nada, nothing. You are a boogeyman, a phantom. You have no power of fear over anyone. He can type idiotic things on the internet. Fear his wrath!

  Mwhahahahaha

• In a nutshell it's a scare tactic promoted by the people who created the debt in the first place. If they really cared about the debt, first order of business would be to let the Bush tax cuts expire and cut military spending by 75% - we'd still be way outspending anyone else. But neither of these things will happen. They want to use it as an excuse to gut Social Security and Medicare. That's it.

• Credit expansion is the governments foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous. "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy. But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against 'real' goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them. It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last.