While Americans stash extra cash to prepare for the economic effects of the looming fiscal cliff in 2013, another more immediate concern has developed: How many people will get laid off as companies brace for spending cuts and tax hikes?
The fiscal cliff will pack a double whammy to some businesses. Companies in certain tax brackets will be paying more to Uncle Sam, while some will see their government funding disappear.
The substantial fiscal cliff effect has prompted firms to rein in spending, delay projects, defer bids - and cut staff.
In fact, a study last month from Ernst & Young, the National Federation of Independent Business, the U.S. Chamber of Commerce and other business advocates revealed the fiscal cliff could slash 710,000 jobs from the already beleaguered job market.
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Fiscal Cliff: Bernanke Urges Congress to Take Action
U.S. Federal Reserve Chairman Ben Bernanke on Tuesday once again reiterated Congress' need to prevent the economy from succumbing to the "fiscal cliff" that as of now will hit taxpayers and the country in 2013.
The fiscal cliff refers to the numerous tax increases and steep spending cuts slated to go into effect Jan. 1, and will throw the already struggling U.S. economy back into a recession.
In his semi-annual monetary report to the U.S. Senate, the chief voiced his concerns. What was missing though was what Congress should actually do to hammer out a budget deal that would prevent a fiscal cliff.
"I don't have a specific recommendation, other than to think not just about the individual policies, but of the collective impact. Congress is in charge here," Bernanke said.
The fiscal cliff refers to the numerous tax increases and steep spending cuts slated to go into effect Jan. 1, and will throw the already struggling U.S. economy back into a recession.
In his semi-annual monetary report to the U.S. Senate, the chief voiced his concerns. What was missing though was what Congress should actually do to hammer out a budget deal that would prevent a fiscal cliff.
"I don't have a specific recommendation, other than to think not just about the individual policies, but of the collective impact. Congress is in charge here," Bernanke said.
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IMF Global Economic Forecast Revised Up on Emerging Market Growth & U.S. Tax Cuts
The International Monetary Fund (IMF) yesterday (Tuesday) raised its 2011 global economic forecast based on strong growth in emerging markets and stronger U.S. output fueled by tax-cut extensions.
The world economy will expand by 4.4%, more than the 4.2% the IMF projected in October, while growth in 2012 is expected to be 4.5%, unchanged from October, the agency said in an update to its World Economic Outlook report.
But even though the world's economies continue to recover, stubborn unemployment in developed countries, along with risks posed by sovereign debt and the financial sector in Europe, could threaten global stability, the IMF said.
"The world economy is recovering, but it is a two-speed recovery," IMF chief economist Olivier Blanchard said in comments posted on the fund's website. "Our forecast is that next year growth will be roughly the same as this year. That's not going to be able to make a big dent to unemployment."
The world economy will expand by 4.4%, more than the 4.2% the IMF projected in October, while growth in 2012 is expected to be 4.5%, unchanged from October, the agency said in an update to its World Economic Outlook report.
But even though the world's economies continue to recover, stubborn unemployment in developed countries, along with risks posed by sovereign debt and the financial sector in Europe, could threaten global stability, the IMF said.
"The world economy is recovering, but it is a two-speed recovery," IMF chief economist Olivier Blanchard said in comments posted on the fund's website. "Our forecast is that next year growth will be roughly the same as this year. That's not going to be able to make a big dent to unemployment."
An Open Letter to Washington: How to Fix the Deficit and End the Bush-Tax-Cuts Debate
Dear Mr. President and members of Congress:
In the months that follow Tuesday's midterm elections, and into the New Year, you all face three very significant challenges. You must:
Let me explain.
In the months that follow Tuesday's midterm elections, and into the New Year, you all face three very significant challenges. You must:
- Find a solution to the Bush-tax-cuts controversy.
- Rein in the huge-and-growing U.S. budget deficit.
- And better police Wall Street, which got us into this mess in the first place.
Let me explain.
To see Hutchinson's solution, and to see how to join our campaign, please read on...
Question of the Week: The Battle Over Bush Tax Cuts is Destined for Deadlock
Democrats and Republicans have staked out their territory in the battle over the Bush tax cuts in the run up to November's midterm elections. However, readers remain unconvinced that the two parties will reach common ground on the issue anytime soon.
Most Republicans want to see all expiring tax cuts extended. Senate leader Mitch McConnell, R-KY, last week proposed legislation to continue the tax cuts indefinitely, wanting to show party unity after House Minority Leader John A. Boehner, R-OH, hinted that he'd be willing to compromise and vote for U.S. President Barack Obama's plan of continuing only middle-class tax cuts.
"If the only option I have is to vote for some of those tax reductions, I'll vote for them," Boehner told CBS's "Face the Nation" Sept. 12. Boehner had previously proposed extending the Bush tax cuts for two years.
Most Republicans want to see all expiring tax cuts extended. Senate leader Mitch McConnell, R-KY, last week proposed legislation to continue the tax cuts indefinitely, wanting to show party unity after House Minority Leader John A. Boehner, R-OH, hinted that he'd be willing to compromise and vote for U.S. President Barack Obama's plan of continuing only middle-class tax cuts.
"If the only option I have is to vote for some of those tax reductions, I'll vote for them," Boehner told CBS's "Face the Nation" Sept. 12. Boehner had previously proposed extending the Bush tax cuts for two years.
We Want to Hear From You: What Will Happen in the Bush Tax Cuts Battle?
Amid party dissension and mixed messages, the outcome of the Bush tax cuts battle is more unclear than ever. And the likelihood that Congress will make progress on the issue – let alone resolve it – before the Nov. 2 midterm elections is diminishing. The Bush tax cuts include breaks for taxpayers at all income […]
How Washington Should Handle the Bush Tax Cuts
The big political issue for the remainder of this year will be the so-called "Bush tax cuts" engineered by U.S. President George W. Bush in 2001 and 2003.
Those tax cuts are scheduled to expire on Dec. 31, with taxes reverting to their 2001 levels.
It's not at all clear which of the cuts will be extended and which will be repealed.
But one thing is clear: The outcome of the Bush-tax-cut debate will have major implications for the U.S. economy.
Those tax cuts are scheduled to expire on Dec. 31, with taxes reverting to their 2001 levels.
It's not at all clear which of the cuts will be extended and which will be repealed.
But one thing is clear: The outcome of the Bush-tax-cut debate will have major implications for the U.S. economy.
To understand the economic implications of extending the Bush tax cuts, please read on...