The Fiscal Cliff

By Tyler Epstein

The grave topic has blanketed news stations and news articles, CNN to WSJ. The “fiscal cliff” is straight ahead, but can be avoided by taking swift action, working towards a compromise, and a temporary end to the gridlock that plagues our elected officials in Washington.

This fiscal cliff is a decisive, and controversial matter—the process of circumventing the overwhelming budget crisis will remain at the forefront of American economics and politics because there are legitimate concerns that America is heading towards an economic disaster. If Congress is not able to agree upon a compromised solution to the impending crisis, no one will be left unaffected—including us, college students.

If inaction remains in Washington, the government will undergo a combined $607 billion in spending cuts and tax increases on December 31, 2012. The slashed spending will be split between domestic spending and the defense budget. The spending cuts were signed into law by President Barack Obama last year in the “Budget Control Act of 2011,” put in place to incentivize Republicans and Democrats to solve the budget crisis by reducing the massive budget deficit in a rational approach. The spending cuts, referred to as “budget sequestration,” are estimated to be $1.2 trillion over a ten-year period from planned spending, including more than $500 billion from the defense budget.

The impending budget crisis has been on the discussion table since August 2011, and it was brought forth again by House Speaker Boehner and newly re-elected President Obama after the elections on November 6. The election left Boehner, an Ohio Republican, with less leverage to negotiate because there is a greater Democratic majority in the Senate and a smaller Republican majority in the House. Boehner and Obama each stated that they are willing to compromise on the approach to avoid this imminent economic obstacle, yet reiterated their previous entrenched positions.

Controversial tax code legislation enacted by President George W. Bush in 2001 and 2003 are set to expire. Democrats and Republicans agree that we must not raise taxes on the American middle class, defined as families making under $250,000 per year. However, President Obama wants to increase taxes for wealthy Americans (those who pull in over $250,000 per year), while the Republicans want to maintain lower taxes for everyone, though they are willing to discard specific tax loopholes and deductions.

The American economy finally appears to be regaining strength and our nation cannot afford to remain in a stalemate if the approaching fiscal cliff is to be averted. If a dramatic compromise is not reached between the two deeply embedded sides, the American economy will be closer to dipping back into a recession. In the past, neither Republicans nor Democrats have been willing to concede political ground on the issue—this is the delicate predicament where our nation finds itself today.  It is our obligation as affected citizens to demand our elected officials to display rational behavior to resolve the budget crisis while undertaking a sensible approach. We must avoid moving one inch closer to the brink, the edge of the fiscal cliff.

The IPad Mini: What It Reveals About the Industry

By Pierre Chalon

When people first began to hear talks about a smaller version of Apple’s famous IPad, many had trouble understanding the logic behind it. What could a smaller tablet possibly offer that the current generation did not already? Is Apple just being greedy and looking for any way to increase its already absurdly huge profits? The answer to the first question might surprise you. The answer to the second is, unfortunately, yes.

Firstly, let me tell you why this is much greater device than you probably think it is. Take away the retina display and A6 processor of the iPad, shrink it by about a fifth and you essentially have the IPad mini. And this is a good thing. For many people, a 7-inch tablet is the perfect combination of a portable and satisfying experience (it is a huge tablet market across the world). Sure, video content will be comparatively less fun to watch on, but applications like iBooks, Safari and Temple Run still provide the same enjoyment despite the screen reduction. If you think the iPad is already a small enough device, try around its miniature counterpart and you may change your mind.

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The key selling point here is that its price is cheap in comparison to other apple devices. Comparing the 16GB-sized versions, the mini sells at $329 in comparison to the iPad at $499. Being $170 cheaper, it’s a very tempting offer to any apple consumer who has not jumped on the tablet boat. A different way of looking at this is the consumer new to the market, who will be willing to pay that difference in a “might as well” attitude.  With the current iPad considered by many to be the best tablet out there right now, Apple is winning either way.

At the end of the day, does it all really matter? Most consumers are not too concerned with technical specifics and when buying these types of devices, it will simply come down to how you feel about it, and that will vary for everyone. This is something Apple knows. In a similar way to the nano, touch and shuffle, both iPads will simply attract to different types of consumers.

What is, on the other hand, of more interest to us as consumers, is how it reveals Apple’s monopolistic ambition to destroy competitor’s market share. You’ve probably heard of the infamous Apple vs. Samsung lawsuit (going the former’s way); many more are currently ongoing and, in essence, they are ruining innovation in this industry. Things like “search” and “auto-correct” are being (or already are) patented, a real obstacle and threat to software engineers who work hard to update, improve and innovate this industry.

In a fragile economy like the current, where innovation and job creation are crucial to success, the mobile industry’s potential stagnation is becoming increasingly likelier and Apple is, without a doubt, one of the principle culprits.