Dear Reader,
Wish a very happy new year, I would like you share with all of you some important topics which helps you in making decision about your financial future, if you are leaving in united states probably you might be aware of discussions about financial cliff, probably by the time I publish this article there might some decision about all these things. But I would like to share some information about financial cliff it's not about debt limit or some thing else there are many tax exemptions are expiring on DEC 2012 which means there will be extra direct tax on individuals like you and me. According to he stats around $500 billion tax beaks are expiring on Dec 2012, government spending cut around $100 billion & some other tax benefits
But kind of effect you see if the deal not taken place or what kind of effect we see if the deal is taken place? Lets discuss about this.
If deal not happened the your direct income tax rates are going to go up. Which means less take home money for you. Once less money in our pockets less spending which means less revenue to companies which means high chances of cutting down the cost by company, which might impact job growth or less jobs. This will create repulsive effect. Economy might go into recession or depreciation.
What kind of effect we see if the deal happens, which means government/Federal bank pump more money into economy more liquidity means higher inflation which means we need to spend more money for same goods what ever we are buying today. imagine $600 billion cash per yearn into economy means more inflation. i remember in 2007 we used to spend around $100 per month for food items & grocery but today same stuff cost us 4 time higher around 300 to 400 USD. this inflation is because of more stimulus pack (money pumped) by fed.
Inflation is long term effect on our economy this will kill our purchase power as our income will not go up this fast. but at some point of time we need to accept that our life's are effected by what ever the decision governments are making, but do you think every one life is like this not really lot of people build there wealth as inflationary proof.
now you decide do want to leave your future in some other person hand or some organization decisions or do you want to take control over it?
