Fear for Fiscal Cliff: deepening

[Franck]

I read on some sites and I heard on television that the deadline to avoid the fiscal cliff is the end of February.
But they avoid to say that: on January 23, 2013, the Republican-led House passed a bill suspending the debt ceiling until May 18, 2013!
What is the reason for such an inaccuracy of the information published?
Create panic in investors?

 

[hortysir]

They're all a bunch of fucking idiots

 

[Rshermr]

I read on some sites and I heard on television that the deadline to avoid the fiscal cliff is the end of February.
But they avoid to say that: on January 23, 2013, the Republican-led House passed a bill suspending the debt ceiling until May 18, 2013!
What is the reason for such an inaccuracy of the information published?
Create panic in investors?

Two different things. Both capable of tubing our economy.
1. Fiscal cliff - our congress and pres voted for a sequester, which creates AUTOMATIC spending cuts if the congress is unable to find tax cuts and spending cuts thay can agree on, and send to the pres for signing. It is a draconian set of cuts that will cause a large number of jobs to be lost. While pretty much every impartial economist recognizes it as a disaster, dems will not sign on to only spending cuts, and repubs will not allow any tax increases. Totally political in nature. But, neither Boehner nor McConnell dare to buck the tea party arm of the GOP. Both come from states where doing so would be political suicide. So, this either will be a completely revenue based solution, making the repubs happy, or we will go over the cliff, making the tea party arm of the GOP happy.

2. The Debt Ceiling is the upper amount that the gov has available to pay it's bills. Simply stated, it has always been set, without opposition, to cover the cost of what the congress has voted on and those ongoing costs that are part of our gov. So, everything from the military to social security to unemployment to the road in Michigan or wherever. Whatever the obligations of the gov are, as voted on by our congress.
The debt ceiling is looked on by our creditors, and our credit rating services, as an indication of our ability and willingness to pay our debts. If we do not raise the debt ceiling, a couple things will happen. First, we will see our gov's credit rating fall. As it did when we almost failed to raise it a couple of years ago. So, borrowing will be more expensive. And second, some things we agreed to pay for will not be paid for. Which will cause layoffs and will further screw up our credit rating.
Raising the credit limit is a normal function of congress. It has happened EVERY SINGLE PRESIDENTIAL TERM. Always, and every time. And it has always been done without objection of any major consequence. Until this last term, when tea party repubs decided to refuse to pass the increase until they got concessions that they wanted.
So, the net is that we either agree to pay our bills, and pass the debt ceiling, or we screw up our economy more. And, as any impartial economist will tell you, a great deal.

So, we have two guns being held to our collective heads.
Sequester, or the fiscal cliff. And the debt ceiling. And both guns are being held by the tea party of the GOP.

 

[Franck]

Starting from march 1 2013, till 2021, the Sequestration Order for Fiscal Year 2013 estabilished the reduction of the deficit by $1.2 trillion in discretionary appropriations and direct spending, that is equal to an annual cut of $109 billions.
In the 2013 the reduction will be of $85 billions, split 50/50 between defense and nondefense functions.
Nondefense cuts are subdivided in:
-2% Medicare = 11 billions
-Uniform percentage reduction = $26b in Discretionary funding + $5b in Direct Spending