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Top of the Agenda: Global Markets Soar on Fiscal Cliff Deal
Congress broke a rancorous stalemate late Tuesday by approving a plan (WashPost) to
avert the fiscal cliff after House Republicans conceded to President
Barack Obama's demand to let taxes rise on the nation's richest
households. European and Asian markets rallied on Wednesday (Reuters)
in reaction to the news, while safe-haven dollar and German government
bonds fell. The measure will shield middle-class taxpayers from tax
increases set to take effect this month, but will also let rates rise on wages and investment profits (WSJ)
for households making more than $450,000 a year, marking the first time
in more than twenty years that a broad tax increase has been approved
with GOP support.
Analysis
"Frankly,
in a way this reminds me of FDR and his meetings with key advisors
after his 1932 election. He told them that he was not sure what he would
do about the economy of the Great Depression, but famously said he
needed to 'try something, anything.' We are in pretty much the same situation," writes John Zogby for Forbes.
"By avoiding that hit and finally nailing down numerous features of the tax code, the deal lifts a cloud
that had hung over the economy and investor confidence. But on almost
every other point, the deal falls short of already low expectations,"
writes the Economist.
"If subsequent agreements make sustained progress towards addressing our long-term fiscal challenges,
this deal may be seen as a significant first step; if not, it's further
evidence of dysfunctional government," writes CFR's Robert Kahn.
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