Eight Ways To Protect Your Finances From A Fiscal Cliff Fall

“Even if President Barack Obama and Congressional leaders somehow manage to patch together a last minute deal to avoid going over the “fiscal cliff” on New Year’s Day, Washington’s budget drama is likely to drag on for much of 2013, meaning continued high economic, tax and investment uncertainty.  “Fiscal policy will be (weighing) on investors’ minds the way housing was four years ago,’’ predicts Joseph Davis, chief economist for the Vanguard Group.

If Congress does nothing at all,  more than $500 billion in tax hikes and $100 billion in defense and domestic budget cuts automatically kick in for 2013, sucking enough cash out of the economy to send the U.S. back into a recession, most economists believe. What’s more likely, says budget expert Stan Collender, is that a falling stock market will pressure the pols to reach a “fig leaf” deal in January that postpones most of the pain, but makes little progress on resolving fundamental disagreements or cutting the long term budget deficit.  In February, Congress will face another deadline, when the debt ceiling needs to be raised.  And at the end of March, a six-month budget resolution funding fiscal 2013 federal operations will run out, raising the possibility of a  government shutdown. After that, any deadlines set in the January fig-leaf will kick in. And come October, there will be a new fiscal year budget for the pols to fight over.

Here are eight steps ordinary investors can take to protect their sanity and their finances while this all plays out…”

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