Maybe I am not the sharpest, but I had honestly NEVER heard this term before September. Apparently, we are teetering on the edge of it, with a strong wind at our back. According to the intertubes, Bernanke, head of the US Federal Reserve, used the term to describe a "massive fiscal cliff of large spending cuts and tax increases" set to begin on January 1, 2013. In other words, we are jin for it if the parties don't suck it up and decide to play nicely with each other for the sake of, ummmm, their actual country.
The fiscal cliff, if left unchecked, will affect everyone. Rich, poor, those on unemployment, doctors who accept medicaid, air traffic controllers, R&D companies, pretty much everyone, will be affected. If left unchecked, the average middle-class family will pay about $2000 more in taxes a year. That will sting, no matter what side of the aisle you sit on.
I have had my head in the sand with this one lately but I ventured to the edge to peek last night and the ramifications of inaction will be astonishing and deep. Expiration of many tax cuts, some that Obama has extended from the Bush days. Spending cuts to most programs via the Budget Control Act of 2011, in remarkably vague wording that only clearly protects the DOD and Medicare. Highway funding, educational grants to states, spending on weapons programs, air traffic controllers- It will all be cut by eight percent. Doomsdayers say it will bring the slow climb out of the recession to a halt- some predict that it will take unemployment close to the double digits and that spending will come to a halt. We will feel the tax increases with any paycheck beginning on January 1, 2013.
Unless. Unless lawmakers from both sides come together to extend tax breaks, extend acts that protect us, and look at the other options that can bring us back from the edge. Unless lawmakers, who reconvene in a few days, do this hard work, we are all looking at immediate pains. I almost wish I had kept my head in the sand when I start to look at this stuff.
Fiscal Cliff- have you heard about it? Is it changing the way you think or spend or plan?