A Grim Reality Lies Beyond Fiscal Cliff:No amount of political squabbling will spare us the very real economic pain it will take to bring the national budget into balance.
BY RICK ACKERMAN
DECEMBER 26, 2012
Recently, I was back in Connecticut visiting my mother. She doesn’t have a computer and hence, no internet. As a result, I relied on my Smartphone and an “app” to check in on financial news most of the time. On one particular day, I noticed that every single news item contained “Fiscal Cliff” in the title or the text. It reminded me that it is rarely the problem staring us in the face that affects the markets. It is the one lurking in the shadows, grasping a two-by-four. Lately, mainstream economic forecasts for economic growth for the current quarter have dropped below 1%. The recession may have begun. An agreement not to do anything right now on tax increases and spending cuts has probably been priced into the market. A recession has not.