The new year began without Congress coming to a permanent solution to the looming "fiscal cliff" issue, and many Americans are wondering how leaders are planning to lower the United States' huge economical deficit and what exactly the "fiscal cliff" is.
The "fiscal cliff" is an economic effect resulting from tax increases and government spending cuts in the past years, expanding the deficit between what the government takes in and what it spends.
Congress has failed to come up with a solution to the problem. As an alternative, they have came to an agreement to raise taxes on individuals who earn more than $400,000 and couples who earn more than $450,000, preventing middle class taxes from rising.
With the majority of the country being middle class, this does not do much to help lower the $14 trillion deficit, meaning the problem will have to be revisited by Congress in the coming months.
Richard Pettey, SGA treasurer, thinks the government will regret not taking action sooner.
"It startles me because they've known for a year they had to work something out about the impending cliff," said Pettey. "It just became so political that the Democrats and the Republicans didn't want to do anything for the other team, it came down to the 11th hour, and they put this Band-Aid fix on the problem. I think it's just going to cause more problems and this is just the beginning."
The main focus of many American's minds is how to lower the $14 trillion deficit, although according to Dr. Alexander Richter from the Department of Economics, people should not just focus on how large the deficit is, but on the economy's growth.
"It's really important for the public in general to understand that it's not just the value, the $14 trillion, you've got to put that value in some kind of context," said Richter.
"It's not the level, it's the growth rate. The concerning factor isn't that we are at $14 trillion of debt. What's concerning is that given the trajectory of Medicare spending we're on an unstable path. If we don't make any adjustments to a number of different things, then we are going to reach debt to GDP numbers that we have never seen in the United States," he said.
So does any of this affect Auburn students?
According to Jacob Dean of the AU College Democrats, this may not affect Auburn students immediately, but will make a difference eventually, and will continue to affect the financial situation of students for many years to come.
"We are going to be the ones to pay the debt. We have a huge debt and it keeps growing by the billions," said Dean. "Whether you are Democrat or Republican, somebody is going to have to pay for that. It affects us, it affects our children and it's going to affect the generations to come unless we come up with a way to get this problem under control in a responsible, balanced way."
Congress must now work together to come up with a more permanent solution, which will require tough choices and unprecedented bipartisan cooperation.
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