Analysts: Fiscal cliff will impact everyone
We've all heard about the ‘fiscal cliff’ over the last few days. It’s getting a lot of attention now that the election is over. But do we really know what it is?
“It’s basically a seven trillion dollar effect on our economy,” Houston financial planner Michael Parmet told KTRH. “It’s composed of automatic budget cuts and a lot of tax increases.”
Clark Hodges is a Dallas-based financial strategist and told KTRH we’ve been living well beyond our means as a country, and the day of reckoning is slowly approaching.
“You’ve spent a lot of money. You’ve been living as if you had a lot of money. And all of a sudden there’s a date where you have to make a new arrangement with your bank or you are going to dramatically owe money immediately,” Hodges said.
Parmet says that if you make 45 thousand dollars a year your taxes will go up by 2 thousand dollars. Your medical benefits will decrease. Jobs could be lost, according to Parmet as well.
“This fiscal cliff could create such a recession that we will lose a lot of jobs. A lot of people will be out of jobs. That’s more important than taking money out of your paycheck, when you get no paycheck,” Parmet explained.
Small businesses, according to Hodges, will be impacted too.
“You’ve got a store on Main Street where people come in and out and buy product. And all of a sudden those people have a higher tax. They are not going to come in your store as much and buy as much,” Hodges explained.
Hodges and Parmet both say we're headed for a recession if a deal doesn't get done.
“Main Street, USA will be really hurt by this unless they go to a compromise,” Parmet said.
Hodges said that, “It more than likely will put us back into a recession.”
Hear the podcast with Matt Patrick and Houston's Morning News as he talks with Hodges: