There are people and there are people.

It is 12.41 AM as I begin to write this. I feel awake. Sleep continues to be elusive. Well, not 'continues'; I did manage to sleep fairly well in the past few months. However, things have returned to status quo. Never mind my sleeping pattern; I feel like I am leading you to the wrong path starting of with my sleep issues. No. That is not what I wanted to scribble down about today.

In our daily life, we come across a lot of people. There are the overly cheery ones; the ones who look like they have just survived the end of the world; and there are people like me. Dreamy, avoiding the cracks on tiled floors, reveling in the crunch of dry leaves. These people either have their idiosyncrasies attributed to them naturally, or in certain cases, achieved through conscious acquisition. The latter raises my curiosity. What were the circumstances that dictated the course of their life, which in turn molded them into the person they are?

***

This morning, while riding the bus from campus, I came across a girl. She was probably around my age, but slightly shorter. She had high heels on. As the bus jerked into motion, she lost balance and stumbled backwards. In doing so, she planted her heels on my right foot for a good second and half. I tried not to show any discomfort. After regaining balance, she turned around and gave me a look. I returned her look with a smile, half-expecting an apology for stomping on my foot. I always thought smiling at a person you had never met before to be a polite thing to do. Turns out it wasn't. Now, I don't know what the reason was behind that look. It was as though she was accusing me for the chain of events that took place in that short period.  She then turned away, mumbled something to her friend, who now turned to give me the same look. Soon, they broke into giggles. I just met the fourth kind of people. 

Fiscal Cliff: What exactly is it?

       Election season is done. Now that we know we will be seeing Obama at the White House for another four years, the focus shifts to the 'Fiscal Cliff' which has been increasingly drawing public attention. I wouldn't  use the term 'panic' just yet to describe the developing situation, but come the end of the year, and if no action is taken, panic might very well set in.

Fiscal Cliff

As I learned in the past two-three weeks, Fiscal Cliff is nothing but a bunch of policies that expire at the end of the year. Policies such as the Bush tax cuts (which favors the wealthy Americans) and Payroll tax cuts among many others are expected to expire at the end of this year. So, if no action is taken, tax rates are going to shoot up for ALL leaving households with fewer dollars to spend.

Secondly, the 'sequestration' cuts will also go into effect come January. These include Pentagon budget cuts of $55 Billion in 2013, $12 Billion cuts to Medicare among other cuts that will see the around $1.2 Trillion reduction in deficit over 10 years.

Potential repercussions

It's quite simple: higher tax rates leads to lesser dispensable income, add to that the fact that money coming into households also goes down as a result of government spending cuts, and we will be faced with a severe 'fiscal contraction'. While the government spending will aide in the long-term deficit reduction, it will not do much good to the economy which is trying to claw its way back to recovery. Large spending cuts leads to slower and slower GDP growth. According to the Congressional Budget Office, these policy changes could lead to almost a 4% decline in the growth of real GDP, meaning a negative growth rate which could thrust the economy into recession again.

Can this be tackled?

If Obama and Congress can eke out a compromise on the policy changes needed, then yes, falling over the fiscal cliff can be averted. Obama wants Bush tax cuts to be extended to all except those those who earn over 250k - he demands that the rich Americans pay a higher tax rate - to which the Republican House has been vehemently against for a while now. They feel that taxing the rich Americans, who they label as 'job creators', would impact business in a negative way, and lead to fewer job opportunities.

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This is where the situation stands at the moment. While Obama has repeatedly said that he is willing to compromise, talks are still not very productive as far as an amicable solution is concerned. The next few weeks will be very interesting indeed.