How Yesterday's U.S. Elections Will Impact The Economy, Sequestration, And The Approaching 'Fiscal Cliff'

Election Over, Obama Faces Fresh Challenge With 'Fiscal Cliff' -- Reuters

* Pending tax increases, spending cuts pose problem
* Fate of global markets, economy at stake

WASHINGTON, Nov 7 (Reuters) - Barack Obama won re-election on Tuesday night, but the U.S. president faces a fresh challenge confronting the "fiscal cliff," a mix of tax increases and spending cuts due to extract some $600 billion from the economy barring a deal with Congress.

At stake are two separate issues - individual tax cuts due to expire at year's end and tens of billions of dollars in across-the-board federal spending cuts due to kick in the day after New Year's Day.

Failure to prevent a dive off the cliff could rattle U.S. markets, and push the U.S. economy into a recession, which could have global implications. How Obama fares with a familiar set of challenges - most notably a Republican-controlled House of Representatives - could color his second term.

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More News On How Yesterday's U.S. Elections Will Impact The Economy, Sequestration, And The Approaching 'Fiscal Cliff'

Obama win has U.S. investors staring at fiscal cliff -- Chicago Tribune/Reuters
Up next: the fiscal cliff -- Politico
Now the real battle begins: ‘fiscal cliff’ looms for Obama with Congress deadlocked -- The Independent
Obama back at the wheel as US economy heads for a fiscal cliff -- The Guardian
Economists' advice for Obama: Avoid 'fiscal cliff' -- CBS/AP
U.S. fiscal cliff risks dragging global economy into darkness -- Uri Dadush, Special to CNN
Fiscal Future, Thy Name is Sequester -- Tim Ferguson, Forbes

My Comment: One advantage that President Obama has is that many who voted yesterday still blame President Bush for the bad economy. But .... hard decisions will still need to be made, and I am very pessimistic that they will be done. Throw in Obamacare taxes and other tax increases in the new year .... Bill Gross is right with this prediction.

Update: Oh ... oh .... this is not a good sign that compromises will be reached.