By Matt Gephardt
(KUTV) Kyle from Salt Lake City wrote to me with a Good Question. He points out that, if there is one thing Democrats and Republicans can agree on it is that going over the ‘fiscal cliff’ will be bad for the economy. He asks, “Why?”
It is which means toy stores, like the "Tutoring Toy" in Foothill Village are hopping.
"This is our 25th year in business,” says owner Bill Sartain. And Sartain says he is glad to see the crowds this year because some years have been leaner than others.
"We certainly felt the effects of the great recession. But we have been in the last couple years inching up a little each year."
Sartain's store is not unique. The economy has been steadily improving. But could that really all come to a crashing halt? Politicians, both on the right and the left say, yes, should lawmakers fail to act avoiding the so-called fiscal cliff.
“We're talking big dollars here,” says Nikki Thon, a partner at the accounting firm Eide Bailly.
She says the fiscal cliff is a term used to describe a deadline. On December 31st, taxes are set to go up for all Americans and some benefits are set to be cut. Should that happen, it will cost the average American around $1600 spread out over the course of a year.
So to Kyle's question, why would going off the fiscal cliff be bad for the economy? Thon says it’s in the math.
"People will have less money to spend, so they're going to be challenged to go out and shop and have that money go back into the economy."
That could mean stores forced to lay off workers.
Thon says that there are steps that people can take now, before the deadline to soften the blow on their paychecks.
"A major asset that most people hold are retirement accounts,” she said. “We are doing a lot of planning with retirement accounts."
As for the Tutoring Toy, Sartain says his experience listening to the exaggerations of politicians and pundits is keeping him calm through this storm.
"It's sort of like the boy who cried wolf,” he says. “We keep hearing so many sad stories over time and yet here we are in our 25th year, we've been through a lot of these things. We're not worried about the fiscal cliff."
Again, going over the fiscal cliff will cost the average American about $1600 a year. If you want to know exactly how much it could cost your family specifically, creditcard.com put together an online calculator that will tell you.
It can be found here: http://www.creditcards.com/credit-card-news/fiscal_cliff-calculator-1701.php
Editor’s Note: If you have a Good Question, shoot Matt Gephardt and email at Gephardt@kutv.tv or call (801) 839-1250
(Copyright 2012 Sinclair Broadcasting Group)