America’s economical cliffhanger: an analysis

September 30, 2012 — by Helen Wong
The U.S.’s debt clock is, to be honest, horrifying. The numbers, keeping track of everything from the Chinese trade deficit to student loan debt, escalate as you watch, climbing from hundreds to thousands to millions and onwards.

There’s this handy little thing called a live debt clock. It keeps track of all the debt in a country up to the nearest second. It’s almost like a heart monitor, tracking every pulse of a nation’s fluctuating finances.

The U.S.’s debt clock is, to be honest, horrifying. The numbers, keeping track of everything from the Chinese trade deficit to student loan debt, escalate as you watch, climbing from hundreds to thousands to millions and onwards.

The total American debt is a staggering $16 trillion.

The current situation is already a serious one. America’s economy is still reeling from the recession that started in 2008. Granted, the economy is recovering, but the rate at which it’s healing is comparable to the speed of a snail.

That just isn’t fast enough to save America, which is why Americans are now facing a rising fiscal cliff by the end of 2012.

“Fiscal cliff” is the shorthand term used to describe the problems the government will face by the end of 2012.

By the end of this year, lawmakers need to choose one of two plans, neither of which are pretty. The first is to allow current policy to go into effect at the beginning of 2013, which means tax increases and spending cuts. The second is to keep taxes and spending as they are.

If Congress decides on the first plan, growth in the economy will be severely hit, and the country may be dragged into another recession. If they pick the second option, the deficit will grow even bigger, and the  U.S. may find itself in the same economic turmoil as Europe.

However, potential plans are just that: potential plans. They won’t go into action by themselves–someone needs to set them off. Congress is failing miserably to take action, indecision ruling its seats.

The endless bickering in Congress is getting the nation nowhere. Democrats and Republicans have completely differing views on the economic issues. Pressures are running even higher than usual because it’s election year.

Democrats favor a mix of tax and spending cuts, while Republicans want to keep things the way they are and avoid raising taxes as much as possible. Both parties agree on extensions on several parts of the Bush-era tax cuts, but that seems to be the only thing they are agreeing on.

The current political situation isn’t helping at all. Congress has had three years to find a solution to the economic problem, but the heavily partisan political environment has not been good for negotiation.

Compromise seems unlikely, and every second spent arguing about a nonexistent solution is another second going toward the fiscal cliff.

The effects of delaying such important decisions are paving a way in gold for America’s economic downfall. Republicans and Democrats need to put aside their petty bickering for the greater good. At the same time, Congress needs to pull itself together and make a decision and a plan before the end of 2012.

All that America can do now is wait, and hope that by the time the government picks itself up, it won’t be too late.
 

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