Consumers Talk About Spending After "Cliff Deal"

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Reno, NV - At Sundance Books and Music in Reno, owner Christine Kelly says she's glad Congress came to some kind of deal to avoid falling off the so-called Fiscal Cliff. But the agreement is not an end-all.

"I think it's a start," she says.

Kelly says all that bickering in Washington just added to Americans' lack of confidence in our leaders and the economy. And she thinks that's going to lead to customers less eager to spend in the coming months.

"I don't think people trust the economy and I don't think people trust what's going to happen," says Kelly.

That's exactly what shoppers around town were telling us.

"People have their wallets in their pocket and they're scared to spend. Businesses are scared to hire," says Pete Simone, a Reno resident.

Dr. Robert Barone, an economist at Universal Value Advisors, says the agreement that Congress came to doesn't have a lot of long-term solutions.

"It did what I thought it would do. It kicked the can down the road. It really doesn't do much. It actually hurts the American consumer because anybody that works for wages gets taxed an additional 2 percent," says Dr. Barone.

He's referring to how the deal does not address an increase in payroll taxes. The cut on those taxes has now expired. Americans earning $30,000 a year will take home $50 less a month.

"I know personally, families will have a hard time with it," says Steve Wadsworth, a Pyramid Lake resident. "Two-percent is two-percent. When you're looking at somebody who may be a single parent, raising kids, that will affect them."

Ashley Menante, an archaeologist who lives in Reno, says she can't cut back.

"I make so little right now that I just pay my bills and stick a little in my savings. But I mean, I am not happy about having a littler paycheck," she says.

"Lately, in the last year, I've been watching everything I spend because of all of the uncertainty," says John Frank, who owns Johnny's Roadhouse, a restaurant in Gardnerville. "But I think my biggest concern is 2014, when we all do our taxes. The changes then I think are really going to be a shock."