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Mark Vitner, Wells Fargo senior economist, on the market reaction he is expecting if the U.S. goes over the fiscal cliff.
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Have and the markets are on Washington watch this hour an all today.
Waiting for some answers to the debacle down in DC mark vintners senior economist at Wells Fargo.
Now from Charlotte, North Carolina.
I look at the nonsense down in DC and just think the markets have under estimated.
All what could happen to the economy with this delay and what could happen in the economy with whatever deal they come up -- Well I think you're right I think they have underestimated Danny costar in underestimating.
What's what's almost absolutely certain to happen.
To the economy.
After this deal takes place -- what they're talking about coming to a deal on is largely the the bush tax cuts.
And and what's suffered from that and what's absolutely certain to take effect.
Is the payroll tax cut the temporary -- payroll tax cut it's going -- -- so it's a withholding taxes are going to go up on every worker.
And the first eight period -- second -- period in January.
Also we have the that the attacks as for the Affordable Care Act.
Those are kicking into so taxes are definitely going up it's just a question and how much.
-- my gut feel is that.
That once we get a deal.
That's when we're going to see some some volatility returned -- the financial markets because we're not likely get a very good deal.
Each.
You talk about the taxes the tax increases -- kick in January 1 just from Obama care from bad health care law you go through that.
On higher income Americans higher payroll tax cut you have the three point 8% tax on investment com.
You can add threshold for writing off your health care expenses goes up as a percentage of it adjusted gross and com.
You have other did medical device maker tax you name it and -- when I look at this and look what's being discussed down in DC I only think.
This is the beginning of years.
Of tax increases on not just wealthy Americans but every body potentially.
-- begging you hit on two key points there one is.
That the folks are underestimating.
The impact of all of these tax increases which equate to about one percentage -- -- GDP.
And that -- lot for the economy to take if we have a strong economy we don't have a strong economy -- -- about 2% so you slice 1% away from that.
And you get a very mediocre economy and best.
The other point is is is is right on the money and that is that.
That this isn't the end of the process the agreement this this this elusive agreement.
Is not the end of the process.
It's just the start of the beginning I mean it's it's the very beginning of the process.
And we and and it's gonna get offer from here on out everything wanna be quickly followed by the debt ceiling debate.
And and my goodness if they can't come to an agreement.
On on on the fiscal -- how are they going to come to any meaningful agreement.
Leading up to the debt -- Well cent mark great to see marked manner of Wells Fargo happy new year enjoy yourself.
Let's have a happy new year thank you -- -- -- 2013.
Flying they've.
