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What 'fiscal cliff' deal means for your wallet?

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    WSJ's Steve Moore weighs in

  • Duration 5:42
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But there's some serious new concerns about the impact -- the fiscal -- deal on our nation's economy and also just in our our everyday lives not only does the new bill at four trillion dollars nation's deficit that's according to the CBO.

But nearly every worker in America.

Will still be paying more federal taxes this year because the bill allows.

A payroll tax cut you've been enjoying for two years to expire so here's an example what that means the median income in the United States for household.

Is just a bad.

50000 dollars according to the Tax Policy Center.

Those households would take home.

About 820.

Dollars last.

Because of the tax increase Seymour senior economics writer for the Wall Street Journal is joining us NASA -- -- it and that's -- household 800 dollars less per year.

We what does that mean for the economy with an -- -- Well great question John by the way I don't think you're one of those millionaires and billionaires that President Obama talked about and I know I'm not -- you -- my agent Steve has negotiated for more.

But I think we're all gonna be paying higher taxes if we gave out about wages and salaries and and the payroll taxes you know -- comes right out of the -- shot.

It will affect people lower income people middle income people lottery come people -- That is a real bite out of Bob -- -- it comes no question about it.

Of course you know while the litany of other taxes that went out by the at the capital gains tax that small business tax that.

The the dividend tax so it was that it was a whopper of a tax increase about 600 billion dollars.

John and I think overall the impact of this tax increase will be negative for the economy I think they'll be lots -- And -- and that's -- So we -- big jobs report on Friday coming out that's gonna give us the last read.

In 2012 about what the job market looks like what about -- Steve he talked about that does listed different taxes we can feel that in our pocket book but what about job growth in the country what does it mean for that.

Well first volley another there are some signs that the job market is picking up no question about it you know we've seen a decline in unemployment insurance claims over the last several -- -- that's a good sign John I -- dot.

You know you've got some industries that are doing very well right now the housing markets picking up.

-- the energy sector is really booming.

And so I think we're gonna get some job growth -- several months but I think this bill.

Means that we're gonna get less jobs than we would otherwise when you got twenty million people already Jana that either don't have a job at all or don't have a full time job.

You know this just wasn't very Smart time in my opinion to be cut it to be raising these taxes on businesses and -- it was interesting last night I was up very -- -- -- -- Box as we watch that -- -- develop and you know the president gave his remarks he said we need more investment in this country and of course he's right we do need more bass and in this country.

Why is he gonna sign today a bill a tax bill that raises taxes on about but I don't get the logic and.

-- about good to know that you are watching fox and not watching porn well.

Last night as Ron Amadon guy and guides you -- your -- your nose to grindstone watching with Talladega it's.

But you know conservatives have argued for the bush -- attacks -- -- -- stat and that's and that that's happening in this bill for the majority of Americans in the other argument is.

Don't cut government spending right now because he's gonna do exactly what you say when you cut consumer spending and that's gonna take more money out of the -- so well I don't I don't agree with what -- what about -- It's maybe I don't agree with that argument at all fact that make the opposite case I think what they economy needs right now is a is a dose of common government austerity we've seen the biggest increase in government spending over the last four years as you know the next big tight job is -- -- be this debt ceiling where we're gonna clip sixteen or even approaching seventeen trillion dollars of dot.

In logic cut spending Janet can -- bring up ducked down so.

A yeah I think after five years -- unbelievable spending spree here in Washington maybe it is time to what tapper back that spending -- and back and bring -- -- cost control.

Never did anybody believes they are and where you know now that we have this next big battle is gonna be coming up we're all looking forward -- for the next -- -- Knew where do you start where is it realistically to -- and government spending being cut.

Well I'll tell you John I mean we know where we're gonna start is they delayed by two months this automatic across the board what they call the sequester Hispanic.

Which is about an eight to 10%.

Reduction across the board in the pants cots and and -- domestic discretionary programs.

The I believe come march of those spending cuts will go forward now that's a pretty big reduction in spending.

But you know the other Republicans I talk to on Capitol -- say this isn't the smartest way to cut government spending but what this president may be the only way to cut spending.

Steve what's the difference group McCarron yeah the syndicate is -- -- -- but we're going -- the seventeen trillion dollar mark with breakfast at the worry at sixteen trillion dollars.

The numbers are so they get their hearts even imagine tropical you know with -- different let me I had.

I got I'm not arguing for more deficit obviously that would be good for our -- about spent.

As you continue move up in the numbers are so big how does that change thing.

You know that's a great point I -- -- -- -- that is something like fourteen digits hit a lot not number and the numbers get so big we become almost and that's the size to let.

But I think every American in there got and then their head they understand.

That a great nation that wants to be the leader of the free world and the -- global economic superpower.

Cannot continue to do that -- we ballot trillion dollars year after year and by the way you know that people were about I have a lot of our diet the Chinese and other countries that are are -- There's a big question about about how that all plays out in the years to -- Stephen -- and you watch it with that said thank you very much appreciate it now this is always.

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