Issue link: https://read.dmtmag.com/i/95301
58 • DECEMBER 2012 • WORLD FENCE NEWS This is the only gas powered driver proven reliable on the market for nearly 2 years! There are so many variables to consider in this Crystal Ball forecast column that, at best, one can only speculate as to which ones, and to what extent, of the variables will im- pact us. The deadline for this forecast is always earlier than the election in an election year, though I believe that the upcoming national election will not only be a close one (at the time I am writing this forecast, it is a dead heat) but also one that will have an outcome that will serve to polarize the nation, regardless of its outcome. Having said that, let's visit some *DON'T SETTLE FOR LESS* Powerful 1720 BPM. Weighs 35 Pounds. Assembled in the USA. Warranty work in the USA. Parts & Service in the USA. USA HONDA OEM Certified. $1,650 includes delivery Call 702-293-3222 or visit www.RediDriver.com of the variables that I mentioned ear- lier. Perhaps the most talked about one is the so-called "fiscal cliff." If Con- gress fails to act, by December 31, the nation will face 600 billion dollars in combined tax increases and budget cuts. December 31 represents a double barreled opportunity to put us behind the eight ball. The first barrel: The Bush tax cuts as passed were scheduled to expire at the end of 2010, but Congress ex- tended them for two years. If nothing happens to change the current situa- tion, federal income tax rates will rise to 39.6% from the current 35% level. In addition, the current 2 percent- age point reduction of the Social Se- curity payroll tax will lapse, and the alternative minimum tax thresholds THE HUMAN LINK by Jim Lucci Management Motivational Associates Many variables impact Crystal Ball forecast would roll back to the 2000 level. The Tax Policy Center estimates that the fiscal cliff would hit 90% of U.S. tax- payers, and cost, on average, $3,500 in extra taxes per household. The second barrel is as follows: In order to raise the debt limit, Congress agreed to create a super-committee that will create laws to reduce the deficit by $1.2 trillion over a 10-year period. Unless you were on another planet at the time, you probably weren't surprised that they couldn't agree on anything. As a result, the sec- ond part of the agreement would slash the budget across the board. Accordingly, if Congress doesn't come to some agreement by Decem- ber 31, the nation will face tax in- creases and budget cuts, as stated earlier, that could cost the family on average $3,500 and affect 90% of households. The next variable is the actual debt limit itself. Remember when Congress was deadlocked on raising the debt limit last year? Among other things, we saw the stock market plunge and Standard & Poor's downgrade the na- tion's credit ratings. Remember how well-received that was? 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It's a limit on how much the government can use to pay obligations that it has already incurred. I hope that helps clarify what we are talking about here. The next variable is the European economic situation. While it appears to me that we, as a nation, can do little about the economic problems of Spain, Greece and Italy, the reality of it is that our economies are so globally entwined that this is a variable that must be addressed. In addition, should Greece default on its debt, to spite the rest of Europe, or the rest of Europe create crushing measures on Greece, Italy or Spain, the world markets would react very badly, and the effect on our economy and its recovery could be very harm- ful, as our economy currently is in what I see as a very fragile state. Now, let's spend a few minutes on thoughts on how I think some of these variables might play out. First of all, quite possibly at the "eleventh hour," the debt ceiling issue will be put off until the first quarter of 2013. I don't think that there is any question that federal borrowing will achieve the legal limit before year end (2012). However, I expect the Treas- ury Department to somehow get an ex- tension and delay the ultimate day of reckoning until sometime in the latter part of the first quarter of 2013. Not much of a respite, but so be it. Regarding higher taxes, polls indi- cate that a solid majority of Americans favor higher taxes on the country's wealthiest people, which would con- tinue to support President Obama's po- sition of creating tax cuts for all but the highest income earners. Hopefully, a compromise could be reached. I could also see a last minute post- ponement of certain deep budget cuts which are slated to take effect in January of 2013. One of the negatives along the way here to said compromises and postponement of budget cuts is that it might send mixed signals on a global level, particularly that the U.S. is reneging on its promise to cut debt. Stay tuned! One of the brighter spots seems to be in housing. In its most recent re- lease, dated October 16, the National Association of Homebuilders/Wells Fargo Builders Index shows that the number rose to 41 from 40 in Septem- ber. This is the fifth biggest reading since June 2006, just before the hous- ing bubble burst. Any reading below 50 generally indicates negative sentiment; however, the survey based on responses from some 400 builders has been tracking higher since last October, when the reading stood at 17. The Index sank to eight, its lowest point dating back to 1985, in June 2008. Recent housing data continues to point to signs that the housing mar- ket is making a substantial comeback. While many economists suggest that the turnaround will continue into next year (2013), the housing market isn't expected to recover fully until job growth improves and the unemploy- ment rate, which "officially" stands at 7.8%, improves further. Some continued on page 60