Fiscal Cliff

There has been quite a bit of discussion in Washington regarding the “fiscal cliff” and what that may mean.

First the fiscal cliff is merely a term that has been designated to a slew of tax cuts that were implemented during the presidency of George W. Bush which are set to expire at the end of the year.

Why is this issue such a big deal?

Remember that the US budget needs to get balanced and there are two ways of doing this: cut government spending (which can impact the elderly, veterans, schools, etc.) or raise taxes.

Our current President and the Democratic party regard these tax cuts necessary for the average personal however they are currently unwilling to extend them to the wealthy.

The Republican’s disagree saying the tax cuts should be extended to all and the way to balance the budget is for the government to cut spending.

That is where both parties currently stand. It’s a sticky subject since the individuals in the position to vote are elected officials who have a responsibility to the people who elected them.

I myself will continue to trade as I always do (based on price and time) and we shall see what transpires over the next few weeks.