So if I beat it on casual, I can only start a new game+ on casual? I can't carry my stuff over to say the impossible difficulty?
If you beat it, you can go into New Game + on the menu.
Once you're in the menu, you can make four choices.
1.) New Game +
Carries over all your shit from a previous playthrough.
2.) Classic Mode
Classic aiming, no co-op, blueprinted weapons only, no crafting. Hard mode.
3.) Pure Survival Mode
No enemy drops bar components. Only crafting yields items. Hard mode.
4.) Hardcore Mod
Dying erases your save file. You can save however. Hard mode.
If you pick 2, 3 or 4 - the game will take you to your save slot selection and allow you to create a new game in the save slot. This save slot is treated as a brand new game (you will even be given the notifications about, for example, your planet cracker plasma cutter or your N7 armour all over as if you're restarting again).
So, the only way to carry your stuff over is to complete the game, and then choose 1. This then allows you to carry everything over.
Completing 2, 3 or 4 yields rewards that are applied to your save file, but as far as I'm aware to make things fair they are only available in 1. (Ie. you can't use the devil horns in pure survival or hardcore).
If you select New Game+ proper (option 1 as I have written here), the game will copy your save file to another slot (named "New Game+") and then allow you to change difficulty as you see fit.