Impending Stock Market Crash: Time Is Short, Too Many Problems To Solve. The Fiscal Cliff Negotiations Are Failing. If US Cant Avert Fiscal Cliff, Everything Will Collapse!

IMF Chief Christine Lagarde Warns U.S. of Worldwide Effects of Fiscal Cliff

from Guardian.co.uk:

International Monetary Fund chief Christine Lagarde has warned the US it has the potential to be its “own worst enemy” over the fragile economic recovery and that failure to reach a comprehensive settlement over the fiscal cliff could see growth plummet to zero.

In forthright comments over the impending fiscal cliff, the IMF managing director said that “if the US economy was to suffer the downside risk of not reaching a comprehensive deal, then growth would be zero”. The markets would react quickly, “and the stock market would take a hit,” she said.

All the current signs of optimism over the economy that she identified – including falling unemployment, the housing sector bottoming out and reduced household debt – would be negated.

Moody’s: It’s deal or die

from Bloomberg:

If Congress were to “kick the can down the road” by extending the current tax-and-spend policies, Zandi predicted the US would lose its Aaa rating because “it would signal that the political will is lacking to put the nation on a sustainable fiscal path.”

The Fiscal Cliff Is Set To Clobber The Middle Class With Nearly 50% Tax Rates

from moneymorning:

If I didn’t know any better, I’d think there’s a small but growing group of people in Washington who think it would actually be good if we temporarily went over the fiscal cliff.

I say that because I am seeing a smattering of articles recently suggesting that somehow going over the cliff “won’t be all that bad” or that we’re “really just talking about cuts that need to happen in the first place.”

President Obama seems to think the same way judging by the fact that he’s dug in his heels, telling the GOP there will be no fiscal cliff bargain that doesn’t include tax hikes.

Now noted budget hawk Republican Senator Tom Coburn has broken ranks, noting that he’d rather see rates rise because that “will give us a greater chance to reform the tax code and broaden the base in the future.”

I find that to be an absolutely appalling argument given how much further the president’s proposals will squeeze the middle class.

As Fox Business Network’s Gerri Willis, an expert on consumer and personal finance issues, recently pointed out to me, the average middle class tax rate is already 43.12%, according to the non-partisan Tax Foundation.

Beyond that, Willis says if we do go over the cliff, the average middle class tax burden jumps to nearly 50%.

Fiscal Cliff 2013: Debt Reduction and Cliff Avoidance Are Two Separate Issues

from policymic:

The fiscal cliff negotiations are failing because both parties are seeking to solve too many problems in too short a time frame. The fiscal cliff and plan for long-term debt reduction are two totally separate issues, which call for solutions inherently opposed to one another. These solutions include raising taxes on everyone, and reducing entitlement programs. To achieve these goals, we need congressional bipartisan cooperation and presidential leadership.

Simply put, to avoid the cliff, Congress needs to find a way to tax less (by extending most rates) and spend more (by maintaining current outlays). Long-term debt reduction, on the other hand, calls for narrowing budget deficits through higher revenue and lower levels of spending.

Read more at http://investmentwatchblog.com/impending-stock-market-crash-time-is-short-too-many-problems-to-solve-the-fiscal-cliff-negotiations-are-failing-if-us-cant-avert-fiscal-cliff-everything-will-collapse/#yvOgwfg8qc6kLf7J.99