The following ran in the Jan. 2, 2013, edition of the Dallas Business Journal. Banking professional Scott MacDonald provided expertise for this story.
January 9, 2013
By Bill Hethcock
The fiscal cliff has been averted for now, but the underlying necessity for more meaningful spending cuts and revenue sources remains, according to North Texas economists, political observers and health care experts who spoke with the Dallas Business Journal Wednesday.
The House voted 257-167 on Tuesday for a compromise negotiated by Senate Republican leader Mitch McConnell and Vice President Joe Biden. The compromise had already passed the U.S. Senate.
The deal will positively affect the stock market and many in the business community in the short term, but it likely will hurt the economy and high earners in the longer term, said Allan Saxe, associate professor of political science at the University of Texas at Arlington.
“It’s a very mixed bag,” Saxe said. “I would think that in the future, inflation may be lurking its head."
The bill spares about 30 million Americans the Alternate Minimum Tax, Saxe said. The fiscal cliff deal extends Bush-era tax cuts to individuals with income up to $400,000 or $450,000 for married filers, Saxe said. That raises the top rates for households above those thresholds to 39.6 percent, up from 35 percent in 2012....
Scott MacDonald, adjunct professor at Southern Methodist University’s Cox School of Business, said the upcoming Congressional debate over the debt ceiling may match the fiscal cliff talks in intensity.
"The concern I have is that in two to eight weeks, we’re going to be dealing with this problem all over again,” said MacDonald, who is also president and CEO of the Southwest Graduate School of Banking at SMU.
MacDonald said he believes in a strong defense, but said Congress has to find a way spend less. “We’ve got to re-think how we do defense,” he said. “We are dealing with a new world.”...