Are you nervous about the fiscal cliff? Everybody’s favorite billionaire Warren Buffett isn’t worried at all.
Even though we have reports from the Congressional Budget Office showing that the fiscal cliff – over $600 billion in automatic tax increases, plus cuts in spending that begin on January 1, 2013 – is bound to send the US right into another recession with a much larger increase in unemployment, Warren Buffett has a different opinion on the matter.
Here’s a quote from a Warren Buffett interview with CNN:
“if we go past January 1st, I don’t know if it will be January 10th, or February 1st, but were not going to permanently cripple ourselves because 535 people can get along.
Also, Mister Buffett feels that President Obama is justified in going after $1.6 trillion in revenue.
“We need $1.6 trillion. We need to get our revenue up to about 19% of GDP, and we need to get our expenses down to 21% or 21.5% of GDP. Everyone knows that. So it’s going to take significant action on both sides. And $1.6 trillion happens to be one percent of GDP, we’ll need that much revenue, and we’ll need to cut expenditures significantly too.”
Warren Buffett also points out that the Congressional divide is the main reason why we are experiencing setbacks. The Republican led house specifically needs to begin to cooperate.
Warren Buffett says:
“It really depends very much on the Republicans in Congress. It doesn’t take the whole group in Congress to avoid that. I mean if 25 Republicans decide that they’ll put country above party and sign up for something that makes sense then we don’t need to go over the fiscal cliff.”
He also believes that the economy is going to stay strong regardless of what happens:
“We had Hurricane Sandy which disrupted the economy for a period, we had Katrina many years ago, we have things that will disrupt the economy, I mean 9/11 was an extraordinary case but we have a very resilient economy. We’ve had one for hundreds of years and the fact that they can’t get along for a month of January is not something that’s going to torpedo the economy.”
So there you go. Will history prevail, and prove Warren Buffett right once again? Only time will tell.