Economic Turmoil and the Approaching

Economic Turmoil and the Approaching Cliff: Summaries From the Wall Street Journal Despite what appears to be a consistent recovery, ongoing economic uncertainty continues to be a problem for businesses, consumers, and the current administration. In addition to the ever-present underlying stressors on the economy, the news has also been filled with mentions of the approaching "fiscal cliff" -- a series of measures Congress imposed upon itself in an attempt to force a bipartisan budget deal before the penalties came into effect.

The following summaries of recent articles appearing in the Wall Street Journal provide a clear overview of current issues in the economic realm and their impact on the nation and the world. In "Fed Dims View, Weighs its Options," from July 18 of this year, Jon Hilsenrath and Kristina Peterson report how Federal Reserve chairman Ben Bernanke presented a rather negative view of prospects for the U.S. economy in the near future.

The article also notes that though several options for Fed action were mentioned, Bernanke specifically avoided making any prediction of actions that would be taken to stimulate the economy. Though he noted that growth was "decelerating" in this period of the recovery and also expressed concern over unemployment levels, the chairman would only say that the Fed was committed to "apolitical, nonpartisan" action "to do what's necessary for the economy," without elaborating further.

The authors also describe the various political pressures being brought to bear on Bernanke and the Fed from both sides of the aisle, detailing several Senator's comments to Bernanke. Policy meeting details give way to some speculation about the actions that can be taken before the article concludes by reaffirming the political pressures that exist for the Fed. Phil Izzo's August 10th piece "Debate Over 'Fiscal Cliff' Weighs on Growth" presents a detailed view of a specific problem in the U.S.

economy, namely the automatic tax increases and spending cuts that will occur without a new budget deal and the manner in which this "fiscal cliff" is already affecting the economy. Expectations in businesses and amongst economists are for continued growth but at a slow rate, and as political fighting about economic issues continues the economy itself is floundering. Estimates of actually going over the fiscal cliff estimate that 2013's growth would be cut by about 2.2 percentage points -- most of the 2.4% projected growth.

Worries about this eventuality are already beginning to negatively impact the economy. On August 22, staff writers at the Wall Street Journal published a piece titled "Q&a: What Is the Fiscal Cliff?" In which they explain this recent term and the underlying legal and economic framework/event that it refers to.

It is explained that the "fiscal cliff" itself refers to the end of Bush-era tax cuts and large spending cuts that will occur at the end of the year if Congress can't agree on a way to cut $1.2 trillion in debt over the next decade. This would lead to income tax and payroll tax increases for almost everyone, with an immediate negative impact on spending and thus on the economy, and with a rising unemployment rate through 2013.

The article also cites Ben Bernanke as saying the Fed would not be able to counter or even effectively mitigate the effects of going over this cliff, yet the politics will have to play out before any action is taken by anyone. Illuminating the issue still further, John D.

McKinnon, Kristina Peterson, and Josh Mitchell's "Most Households Face 'Fiscal Cliff'" from the November 21st edition of the Wall Street Journal present personal stories that typify the impact the fiscal cliff would have for people on various rungs of the socioeconomic ladder. Describing the various tax increases and other effects of the fiscal cliff in general terms first, this article then gives an example of an individual that meets the general description for every basic income/economic bracket identified.

A human face is put on the numbers and the rhetoric that have been occupying many headlines and stories in the.