These days much attention is given to the U.S. Congress and the President and Americans are waiting to hear news about a deal to avoid the so called “fiscal cliff” before January 1, 2013.  If no deal is reached, tax increases and automatic cuts to Federal spending are expected to go into effect as of January 1, 2013.  If that happens, it will negatively impact the U.S. economy as well as economies all throughout the world causing economic slow-down, hamper fragile economic recovery and send many countries into another recession.

Historically, the Congress has approved spending bills by the deadline only four times; 1977, 1989, 1995 and 1997.  During the Fiscal Year 2011, the entire year was paid through continuing resolutions without a budget.  According to the Congressional Research Services, since 1977, an average of 178 days of each fiscal year was funded by continuing resolutions.  Not having a Federal Budget cost the government more in terms of on-going contracts and the indecision cost many other sectors outside the Federal government.  If the President and the Congress are unable to reach an agreement before the deadline, it will put the country over the “fiscal cliff”.