US Economy: Don't freak out about the fiscal cliff, financial experts say - "is it all political "mumbo jumbo"? - by Deborah Caldwell

Eleanor Blayney is telling her clients not to freak out about the fiscal cliff. "We're not talking about the failure of the banking system …we're not talking about fraud or a housing crisis," said Blayney, president of Directions for Women and consumer advocate for the professional Certified Financial Planner Board. "I'm actually telling people they should worry about the (Dec. 21) Mayan new year if they really want to worry about something scary," she said.

Blayney said she reminds clients that the dynamics of today's financial environment are nowhere near as dire as the 2008 financial crisis. "That did seem to be the end of civilization as we know it," she said.

The fiscal cliff crisis, she said, is more like the rollercoaster of August 2011, when the United States lost its AAA rating. "That was very short-term. And we've gone on and had a relatively strong equity performance this year," she said.

Blayney is a lot more sanguine – and light-hearted -- than many financial experts. But make no mistake, the fiscal cliff-- the package of tax hikes and deep spending cuts set to kick in automatically on Jan. 1 if Congress can't reach a deal -- will almost definitely impact you.The question is how much, and how can you minimize damage to your finances? We asked financial advisers for their advice.

Note EU-Digest: In a follow-up from AP comes the following comment: "Diving off the so-called fiscal cliff with no Plan B at the ready is perilously risky, most Americans would agree. But what about a controlled, temporary fall?

It is an option that the White House and Republican leaders are scrambling to avoid, through tense 11th-hour negotiations to strike a deal that would prevent more than $500 billion in tax hikes and mandated federal spending cuts from kicking in beginning January 1.

Many in Washington would howl in protest at such an irresponsible gamble as purposely tumbling off the cliff, and there is no airtight certainty over how the markets, both American and international, would react.

But working out a deal in the suddenly severe landscape of early 2013, when tax hikes hit all Americans who have jobs, could prove politically more palatable for some conservative Republicans."


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