Saturday, November 24, 2012

The fiscal cliff gets personal

I downloaded a budget spreadsheet, and I was trying to figure out how much money I was going to have this coming year to pay off my debts and replenish my savings- which were totally wiped out by going to the hospital (high deductible plan).

But I don't know what my take home pay will be. Because I don't know what the tax rates will be. How much is my pay check going to go down? It would be nice to know.

For those who believe in austerity, the fiscal cliff should be a good thing. Yes, it might shave a couple of percentages off the GDP, but it will have a long term good effect on the deficit, and reassure business and the world that we are serious about the deficit. Aren't we always telling other countries that they need to do austerity? And yet, when in comes to ourselves, we call it a fiscal cliff.

Europe hasn't done too well under austerity, but how well would it have done with continued uncontrolled spending?

I wish that economics were truly a science, and we could actually figure out what it is we should be doing, instead of just guessing. But economies are so large and complex, how can we understand them? It is like trying to predict the weather a year from now.

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