You probably will not have a particularly thrilling ride if you attempt to leap off the fiscal cliff while strapped into your red white and blue hang-glider. I have recently discovered that we are not talking about that kind of cliff. Apparently, this cliff has more to do with math and money than altitude and thrill-seeking.
And, no, the cliff is not made of money.
After talking with some folks, I quickly realized
that I was not alone in my misconception about the nature of the fiscal
cliff. This cliff will likely leave only accountants
and tax specialists gasping for air. Much
of the confusion likely arises from the mere fact that Congress is involved in
this matter. Congress, along with being
a fairly constant source of confusion, has been steadily proving over the
course of several generations that it is not adept in dealing with either math
or money. This cliff is all about math,
spending, taxes, and Congress.
Here is the deal.
The fiscal cliff is actually a rather lurid description of a combination
of broadly forced spending cuts and sun-setting tax breaks—all coming by
default (please read as inaction by Congress) quite abruptly on the last day of
December this year. The “cliff” is what
the economy may plunge from should everyone’s taxes suddenly rise and the money
funding virtually all programs suddenly retract or vanish all at once. Some economists and business-types believe the
aforementioned combination will crash an already lumbering economy.
During the last session of Congress, the members of
that body put-off a bunch of difficult decisions related to taxes, spending,
and debt and then plunked a temporary fix on the doorstep of 2013. That is the fiscal cliff.
The hope now is that the House, the Senate, and the
President can all gather and fashion a fix for this before the end of this year.
Tennis, anyone?
--Mitchell
Hegman
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