The Fiscal Cliff Explained by Graphics

This site is one I've been watching and referring people I know toward for awhile now as a way to visualize some of the more complex things that make up the economic mess around us. Actually, some of what they do with Info-graphics is what I hope to develop for skills in the college path I'm on. Anyway....They developed a very startling but informative info graphic on the Fiscal Cliff and I wanted to share it. They really have a way of boiling things down.

The Fiscal Cliff is the name given for the 2013 increase of Federal Government taxes and budget cuts.

The Bush-era tax cuts expire and the 2013 "Budget Control Act" kicks in, among other budget cuts & new taxes.

The Fiscal Cliff is set to reduce the 2013 US Government budget deficit by roughly half.

The Fiscal Cliff will remove $607 Billion from economy (GDP), resulting in 4% drop, pushing it back into recession.

The Fiscal Cliff can NOT be avoided. It must happen to fix the budget deficit; any delay must be paid for later.

The Fiscal Cliff will NOT reduce the US debt, only slow down the growth.

The Fiscal Cliff's size and impact are visualized below in physical $100 bills.

Fiscal Cliff Explained in Graphic Form

They have a number of them on there and they're all interesting to see IMO. This is a new one I hadn't noticed before though. Any way we look at it, to also consider CBO estimates recently reported by them directly, Happy New Year probably isn't the best term to use for the 12/13 transition of dates.

I'm not sure I entirely agree with the premise they come from in this needing to happen and especially to happen in the brutal way it's going to if the politicians on both sides don't pull the figurative rabbit out of their hats for a Christmas Gift. However, the numbers are important to see and nothing says it like that.

reply to post by Wrabbit2000


You're the man Wrabbit That a very good cup of coffee.

When something is as broke as this economy, fixing it is going to be problematic and hurtful for everyone. It has to be. Both sides did their share in breaking it, so both sides are going to feel a bit of financial pain. People need to check their agenda's at the door, compromise, and think of the common, long term good that this "fiscal cliff" is going to have.

I want it to happen I really do go off that cliff!

The current events are what we all saw in the tarp crap.the stimulus crap that has led us here.

Hype it up so that they have to do something, and when they do something it has always been wrong.


So imo get a running jump and fly off that cliff

Edit to add they picked an awesome name for a website DEMON-OCRACY the rule of demons.

Who can argue that?

reply to post by neo96


I have to agree NEO. Let's jump! How in the world can we ever pay off a faux 16 TRILLION debt to the Federal Reserve?? Our government officials signed on to this takeover of our soveriegn nation 100 years ago, and every damn one of em that has been elected since has kept the truth from us.

I finally got to watch the movie "In Time" last night and the whole time I watched it, I couldn't help compare how in the movie they used "Time" as how long a person could live, and I couldn't help but to compare it to how our fake monetary system that we use today is just about the same damn thing!

We have a rogue government running this country and they are enslaving us to a monetary system that gives them all the freedom in the world while taking ours away. I am not making this as a bash about our current administration because it is not. Anyone can look and see that our current POTUS is doing nothing more than accelerating what has already been put in place many years ago.....

If you haven't watched the movie I would suggest you give it a watch and let me know what you think.

Let me know, by sending me an U2U......

reply to post by seeker1963


I do unless they is what they want us to do with that asinine plan that was presented to the house.

cloward and piven is well known to quite a few folks overwhelm the system crash the system so they can offer their "solutions".

Imagine millions out of work screaming bloody murder government save them!

The set up for a complete totalitarian state.

reply to post by neo96


Nah, they want us to think that by giving up more that we can save ourselves. In reality, by us giving up more, we give them more CONTROL as they further pillage, rape and burn those of us who believed in them.......

We allow them to control us, and as long as we put our faith in them to make the right decisions, we only put ourselves further into their control!

What is happening now across the world, is not an accident! It is well planned and the masses have allowed them to do it.

reply to post by seeker1963


Like movies then watch the Atlas Shrugged movies 1 and 2, but of course quite a few don't like Ayn.



Control us yeah they do.

Excellent visual aid wrabbit! Nice find! I will be sharing this often to try and illustrate to people just how big this problem is. Until some folks see it this way, they cannot comprehend the numbers.

Now take that graphic and think of this. 1 pallet = 100 million dollars. It takes 10 pallets to make a billion dollars. It would take 10,000 pallets to equal 1 trillion dollars. We would need 160,000 pallets to pay for our debt...how is that for representing the madness? I don't think most people even want to try and bring that into comprehension...it's too scary.

Originally posted by Taupin Desciple
reply to post by Wrabbit2000

 

You're the man Wrabbit

That a very good cup of coffee

When something is as broke as this economy, fixing it is going to be problematic and hurtful for everyone. It has to be. Both sides did their share in breaking it, so both sides are going to feel a bit of financial pain.

Boy, I feel totally ripped off.
I have never tried to beat the system, defaulted on a loan, nor applied for more house than I could afford, nor been foreclosed upon, or any other sort of shady dealings.
Although I am completely debt free, I am going to suffer just as much as all those, TPTB included ( just moreso for me) and I feel like I'm getting worked over harder for playing the game with honor and integrity.

What a succor I am

reply to post by Jeremiah65

Indeed.... Now, here is this for a thought to stop you cold, after seeing the true visualization of what this money IS at these levels........Where is it all really being spent?

TARP kicked loose 500 billion that Bush spent to the Inauguration day of Obama and then Obama went on to dust off the other 300 Billion of that original money. Then came Porkulus I & II. On it's gone..... These charts all predate the QE-3 which adds 480 Billion a year to the deficit, as a plain fact of what has already been done in recent months and has an open ended commitment. That was the brainchild of Treasury and the Fed too. So always add that on as it's accruing at 40 Billion a month atop all other things being presented at the moment.

This is from September for context of how recently that factor was added to this nasty mix:

The policy, known as quantitative easing and often abbreviated as QE3, entails buying $40 billion in mortgage-backed securities each month. The end date remains up in the air, as the Fed will re-evaluate the strength of the economy in coming months.

The Fed is wasting no time. The purchases begin Friday and are expected to add up to only $23 billion for the remainder of September.

Bernanke's own words are interesting on it....

"I want to be clear -- While I think we can make a meaningful and significant contribution to reducing this problem, we can't solve it. We don't have tools that are strong enough to solve the unemployment problem," he said.

The Fed's accommodative policies have been contentious from the start. Republicans often warn that as the Federal Reserve has expanded the money supply, it has set the economy up for rapid inflation in the future.

Source

This is all relevant to the Fiscal Cliff because it all contributes in small ways to the 'Perfect Storm' scenario that has formed up for Jan. For what it's worth, Romney strongly asked QE-3 not even be done because the result would doom his term in some ways from day one. Well, he lost....so now it's theirs to make good with and it's just one of a few things pushing ever so steadily toward that cliff edge. 'nudge 'nudge, eh?

reply to post by Wrabbit2000


I said it before in other threads...madness...absolute madness.

QE3...40 billion dollars a month. Here's a number that will kick you in the crotch....40 billion dollars a month is the equivalent of 121 dollars a month for every single person in America...all 330 million of them.

Astounding...and they are going to expect us to pay that back but we will never see a dime of it.

How about they send me and my family that 121.00 each member and I'll finds something useful to do with it...

reply to post by Jeremiah65

Well now lets see... There is me, my better half and our Son. That's 3 of those 330 million. So we owe $360 a month, give or take, to buy the debt load of everyone else's mortgage?? Remembering of course, this is merely one of many things running like this at the moment and the same time. Ugh! (We won't get into the migraines of figuring differential for all those who can't pay their fair share to what that means we each DO owe.. .lol)

That's over half what my primary mortgage runs me. (I bought a true humble abode... lol) I guess those who bought modestly, chose carefully and planned well just played a suckers game when it comes down to it, huh? What does hard work and a job well done give besides support to redistribution? ...and to think, if I could have looked myself in the mirror all these years while doing it, I could have just been a leach my whole life and seemingly wound up in the same spot working has ended with. Something is kinda wrong with this picture, eh?

We can`t keep kicking this can down the road forever,we need to get spending under control, if not now,when?
Someone has to step up and take one for the team, lets put the pedal to the metal and drive this sucker off the cliff so that we can hand the country over to our children and grandchildren better than we found it.
The baby boomers made a mess of things they are handing over a country to their kids and grandkids that is bankrupt and corrupt,maybe this generation will have the brains and balls to do what their parents were to stupid,greedy,selfish and cowardly to do?
Tighten up your seat belts boys and girls it`s going to be a bumpy ride, no pain no gain.

Its obvious this debt was never meant to be paid back, all the sucker nations who bought US treasuries to purchase oil in the last 10 years will get stuck with he bad debt when WW3 kicks off soon.

reply to post by Wrabbit2000

Indeed.... Now, here is this for a thought to stop you cold, after seeing the true visualization of what this money IS at these levels........Where is it all really being spent?

It's being spent mostly on war and paying interest on the debt.

BTW guys I love the movie suggestions in this thread. I'll have to see In Time and Atlas Shrugged now, they both look super awesome.

nothing like watching a global debt based system, come to it's natural end.

i think it's the show of a lifetime to be able to see such a corrupt and dark system end. when hundreds and even thousands of years of debt based servitude becomes apparent to the masses, one can only hope they have mercy on their captors of the past.

every problem you see in any economy which currently suffers, can be traced directly back to INTEREST on debt and subsequent manipulation by it's users. before that occurs though, you have to realize the true culprit that made this possible and that's having enough people who care not of others, to excel in it's game.

The fiscal cliff is nothing but a media attempt to spread fear.

It raises taxes on the wealthy back closer to where they should be, and forces cuts in a lot of areas where cuts need to be made.

Just like when Clinton raised taxes on the rich, this will be good for the US.

Originally posted by Wrabbit2000
I'm not sure I entirely agree with the premise they come from in this needing to happen and especially to happen in the brutal way it's going to if the politicians on both sides don't pull the figurative rabbit out of their hats for a Christmas Gift. However, the numbers are important to see and nothing says it like that.

The market is going to force us to run no deficit by forcing the interest rates on our bonds to skyrocket. The only way that does not happen is if the fed inflates the hell out of the currency to pay the debt off. But that would destroy the economy more than just defaulting.

Now if you are saying we don't have to make major moves to shrink the deficit now, that might be true, but we are only putting it off by a short period of time. It is equivalent to giving the market the middle finger and daring it to do something. Sooner rather than later it will give us the finger right back.

If we attempt to reduce the budget now in a serious way it sends a message to the market we are serious about getting our act together, but it will only buy us a little time. Ultimately we will have to run a surplus before the market will stabilize. Yes major deficit reduction will likely cause a depression, but our only choices now are a controlled depression, or one that is completely out of the governments control.

reply to post by proximo

I certainly don't argue the need to take action and drastic action at that. Another member did the math on this based on the figures I laid out across my budget thread. Kingpin003 was the Screen name on page 3 of the thread linked in my signature, he wrote:

With a constant surplus of 500 Billion per year it would be 2079 before our debt is eliminated. Increasing the surplus to 750 Billion means we are debt free in 2044. These projections would be unacceptable to any debtors(not to mention it is unreasonable to expect 30+ years straight of surplus).

Now, I didn't go through all the trouble and figuring required to get those numbers. Honestly, after all I did go through making that thread back then, I didn't want to know the rest and how that side of it worked out.

Keep in mind, that was dealing off figures before QE-3 as well. So, with that in mind for what would actually be required, year in and year out, without fail..even one year....do you think we make it?

What this fiscal cliff is, is the uncontrolled and truly unintended way of doing this by allowing the overlapping of at least 4 different major events to form a giant whammy to our economy in a few weeks. Drastic action done deliberately, YES...... Drastic action simply allowed to run it's course is the worse dereliction of leadership I can imagine and we're doomed with this kind of approach in my opinion.

The President of the United States has the power...literally HE HAS THE POWER to call Congress into Special Session and KEEP them there as long as his little heart desires over this budget issue. He can hold them there until Christmas. He can literally hold them in session and in Washington until the term of this Congress expires officially.

If the nation must have a shaky Christmas and a crappy New Year in all too many cases this year, the least Obama can do is insure Congress fully shares our misery. Every last one of 'em. He can even laugh about it from Hawaii for all I care. Congress created this when it comes down to it. Congress can suffer for it with everyone else, IMO.