“Stocks accelerated their post-election sell off across the board Wednesday, triggered by worries over the looming “fiscal cliff” and as fears over Europe’s economy reemerged,” quoting NBC News.
“Exit U.S. presidential elections. Enter looming budget crisis. And once again, a disconnect between how Washington and Wall Street see the world could cause pain for investors if the two get their signals crossed.
At the beginning of next year, $600 billion in tax increases and spending cuts – known as the fiscal cliff – will automatically become law unless Congress acts. Such dramatic moves could hammer consumer and business spending, push the U.S. economy back into recession and send markets reeling.
However, there is a sense that neither the financiers and investors in New York nor the lawmakers in Congress are taking each other seriously enough. Many in Washington believe Congress could do nothing, and the market reaction would be relatively sanguine. Plenty on Wall Street say the fiscal cliff, one way or another, will be dealt with. It raises the possibility that Congress will sail over the cliff, and markets will freak.”
“Senator Patty Murray, the second-ranking Democrat on the Senate Budget Committee and a top player in last year’s debt limit and deficit reduction negotiations, was among the first lawmakers to voice willingness to pursue a previously unthinkable tactic.
‘If we can’t get a good deal – a balanced deal that calls on the wealthy to pay their fair share – then I will absolutely continue this debate into 2013 rather than lock in a long-term deal this year that throws middle-class families under the bus,’ Murray said in a speech at the Brookings Institution in July.
A spokesman for Murray said her views on the topic have not changed since then.”