Crisis not over, despite what The Australian claims

Posted by – 3 January, 2013

This is the headline from the Australian today about the US budget deal:

Crisis over, world looks to recovery as shares rise and dollar surges

Wrong! The sloppy report from the Australian continues.

“Under this law, more than 98 per cent of Americans and 97 per cent of small businesses will not see their income taxes go up,” he said. His comments came shortly after the US House of Representatives voted 257-167 to support a deal that had received overwhelming backing in the Senate in the early hours of the morning.

At the rate the US Federal government is accumulating debt, a new budget deal will be needed sometime in February 2013. Crisis not over, just diverted by two months. Furthermore,

….the legislation pushed through the Senate and House on Jan. 1 does nothing to prevent a temporary cut in the Social Security payroll tax from expiring. That means, under the agreement brokered by the White House and Senate Republicans, 77 percent of American households will be forced to fork over higher federal taxes in 2013.

Households making between $40,000 and $50,000 will face an average tax increase of $579 in 2013, according to the Tax Policy Center’s analysis. Households making between $50,000 and $75,000 will face an average tax increase of $822.