What the Fiscal Cliff means for your wallet - Fox 28: South Bend, Elkhart IN News, Weather, Sports

What the Fiscal Cliff means for your wallet

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As the President and Congress try to get it together in Washington over the looming Fiscal Cliff  you may be wondering what it means for the money in your wallet?  We asked a St. Mary's Economics Professor and he said there is reason to be concerned.  However, a lot of people we talked to on the street Thursday said they aren't worried, at least not yet.

"As far as I can tell we've survived before and we'll don it again one way or the other," said Eric Evans.  That's why he's not too worried about going off the fiscal cliff.  "As far as I know things are going to get more and more expensive until the day I die...so money, no money it does not really matter," said Evans.

Lisa George isn't losing sleep over fiscal cliff either.  "I don't see that as affecting me yet."

But economists say there are plenty of people who are worried it will affect them. Holiday Spending this year was dismal and economists are blaming the fiscal cliff.  Richard Measell, an Economics Professor St. Mary's College said, "the grinch that stole Christmas is the fiscal cliff...with the fiscal cliff and concerns about that consumer confidence has really dipped in the last few weeks."

He said if you like you're money you definitely have something to worry about.  "Somebody making 50 thousand dollars over the next year will see their taxes go up by one thousand dollars," said Measell.  Translation, you'll have less money to spend.  Measell said, "consumers are very cautious now, spending less and saving more, which is a good thing but also a bad thing.  It means they're not gonna be out there spending their money and getting merchandise moved out of stores so firms won't be needing to hire so many people."

Still, some local consumers really don't think all this doom and gloom is heading our way, it's just politics as usual.  "I know it sounds bad but we've had problems with politics before," said Evans.  And George said, "they want to not back down on what they say they're going to do whether it's republican or democrat, so they have to play this game and then when it all comes out it's usually some kind of compromise."

Even Measell doesn't think we'll fall off the cliff and stay there, but any kind of fall, no matter how short, still hurts.  "It probably won't be a long term thing, congress will probably act.  But in the immediate future it could be disruption to people's economic situation."

If nothing is done in the next few days you'll notice changes in your first paychecks of 2013.  You'll see more money going to taxes and less going in your bank account.  Another big issue, If you're without a job right now, be warned, federal long-term jobless benefits would expire too.

 

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