Fiscal Cliff Deal Reached: Why 2013 Will Be Better Than 2012

Fiscal Cliff Deal Reached: Why 2013 Will Be Better Than 2012Politics are always a complicated issue. But something as large as the fiscal cliff dilemma affects all of us directly. Regardless of where you stand, if you’re an agency owner, a small business owner, an employee, an employer, someone who runs a brick-and-mortar store, or someone who makes their living online, the fiscal cliff affects you. Fortunately, news outlets this morning report that a deal has been made and passed in the House of Representatives and the Senate.

The Deal

Reuters reported that “The United States averted economic calamity on Tuesday when lawmakers approved a deal” avoiding the worst of the fiscal cliff: tax hikes and cuts to spending. While the term calamity may be a bit of an exaggeration (the analogy of the “cliff” is a little exaggerated as well), it’s certainly better for all of us that a deal was made.

If you’re curious, the White House provides a great summary of the major points of the deal. Some of the most important inclusions are permanent extensions on certain tax cuts aimed at the middle class, an extension of emergency unemployment insurance, extensions of tax cuts helping families and students, extensions of incentives for business to use renewable energy, and raising taxes on the wealthiest earners, estates, and capital gains to 1990s levels.

Why 2013 Looks to be Better than 2012

As agencies and small businesses make plans and set achievable goals for 2013, it’s important to consider the economic environment they will be operating in. Now that a deal has been passed to remove the largest block of uncertainty in the US economy, many analysts predict that these goals are likely to become true. At minimum, the deal means that the majority of consumers will have more money in their pockets to spend and stimulate the economy.

Most experts believe that the US economy will continue to grow in 2013. The growth will not be immense, but things are looking positive. There are predictions for a hiring boom, which David Francis wrote about for US News & World Report. What’s even more exciting is that David quotes Philip Noftsinger saying the only thing possibly preventing 2013 from turning out to be an “accelerating positive year” for jobs was the fiscal cliff. Now that an agreement has been made, we can expect 2013 to be a hopeful year.

Chris Reese reported for Reuters writing that “borrowing by small U.S. businesses rose marginally in November … in the face of economic and government fiscal uncertainty.” Now that much of the government side of this uncertainty is gone, we might see borrowing increase as small businesses feel more comfortable growing their enterprises. That’s good news for agencies in all markets.

Things Looking Positive, but Not Booming Yet

This positive economic environment means people are going to continue spending, and so are businesses. Marketing and advertising, social media campaigns, and other strategies are going to be even more important in 2013 than they were in 2012. It would be ridiculous to claim that 2013 will be the year everything becomes all peachy and nice. But it’s nice to believe that there are signs showing that 2013 will be a better year than 2012 for the US economy and the businesses and consumers that make it work.

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Patrick currently lives in Somerville, Massachusetts, where he is studying for a Master's Degree in Intercultural Relations. Upon graduation from Penn State in 2008, he spent two years overseas in Kyrgyzstan with the U.S. Peace Corps. While writing is currently his chosen way to put food on the table, he loves fitness and exercise, which he believes makes up for his avid computer gaming habit.

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