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Asset Based Loan

Would Social Security not get paid post fiscal cliff?

Would Social Security recipients not get paid in a post fiscal cliff world?   Not likely, thought prospect of it is still in the cards, even if the Government does not want to go there.

The Government would almost certainly pay interest in it’s debt, otherwise the credit rating would nosedive in a hurry and future borrowing would skyrocket.    The Government knows that Seniors would be in a massive panic if their checks were interrupted.   It would be a public relations disaster.   Many seniors have no other sources of income and are not able to seek other employment.

Would Social Security not get paid post fiscal cliff Resources:

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Asset Based Loan

Who would not get paid if we pass the fiscal cliff?

The so called fiscal cliff is approaching, again.   So what question should, or would the average citizen be most interested in?    Maybe the first question would be, who will and won’t get paid?

There will be a lot of talk about how every one will be taken care of, but the harsh reality is that someone won’t get paid.   It will be a sure thing that that someone, of which there would be many, won’t be happy.  That may end up being the understatement of the year.  If this happens, in the end, all of the current politicians will end up being the big losers and public anger will be targeted in their direction.

As far as who won’t get paid?   Probably defense contractors will be very high on the list.   They are paid great sums of money but it is not a payment direct to the people.   It won’t make much difference though as it won’t be long before their employees aren’t paid.

Highway departments and maybe some unemployment recipients would be next on the target list.   Basically, the Government would want to keep paying interest on it’s debt but soon after, many citizens would stop receiving money.

 

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Asset Based Loan

Does Congress get paid if we pass the fiscal cliff?

In the debate about the upcoming fiscal cliff, politicians have talked about how many people would not get paid and many services would automatically be cut back.

However, if we pass the fiscal cliff, would the politicians themselves be unpaid during this time until the problem is resolved?   Surprisingly, it turns out that if the fiscal cliff is passed, Congressmen, Senators and the Executive branch, which means the President and Vice President, etc. would all continue to be paid.   This can certainly be seen as the legislative branches having less incentive to solve the problem immediately.

This can certainly be considered quite unfair.   The politicians create an unnatural situation in which the government cannot pay obligations of the utmost urgency such as debt and treasury bill obligations to bondholder, transportation,  potentially even parts of the military and social security and medicare, but they continue to be paid.  There has been backlash about this in the past.  There are provisions in the law which states that the politicians continue to get paid even if the government has monetary issues in other areas.

This may be somewhat understandable and tolerable to the public if it is an unavoidable situation, but the same public finds it completely unacceptable if the problem is created by
the politicians themselves.

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Asset Based Loan

What is the fiscal cliff?

There has been much talk about the fiscal cliff.   What is the fiscal cliff and how much of a danger is it?    These questions and more may best be summed up in a simple question and answer format.

Question: What is the fiscal cliff?  Answer: The fiscal cliff refers to a moment in time after which the Government does not have enough money to continue to meet it’s obligations, basically, to run itself.

Question:  Why will the Government run out of money?

Answer:  There are really two answers to this.   The overall reason the Government will run out of money is because, for several decades, it has spent more, or far more than it takes in in revenues in just about every year.    The specific reason it may not have enough money to continue to pay it’s bills is because in order to be able to continue spending more than it takes in in revenues, the government has to continue borrowing to make up the difference.   The government has set up a borrowing limit, commonly called a debt ceiling.   In order for the government to borrow above the debt ceiling, Congress must approve such an increase to the debt ceiling. The president cannot do this by himself.    If the government does not approve an increase in the debt ceiling, it will suddenly, within the span of a day, not be able to pay over 40% of the bills it currently pays.   Monies and accounts can be shifted around so that this day can be delayed, however there is a point in time when it will occur.

Question: When is the fiscal cliff:   Answer:   The fiscal cliff is sometime in the month of December 2012.     There is not an exact day because the government can move money around for a short period of time, estimated at approximately a few weeks.

So the answer to the question what is the fiscal cliff is quite simple.

What is the fiscal cliff Resources: