I wanted to provide a link today to a Washington Post blog article that provides answers to frequently asked questions about the “fiscal cliff” we have been hearing so much about in the news recently. As you’ll see, this is quite a complex problem, and hopefully Congress and the President will find a solution before it’s too late.
Here’s a short excerpt:
What is the fiscal cliff?
The fiscal cliff is an inapt metaphor for the looming consequences of some very bad congressional decisions.
On or around Jan. 1, about $500 billion in tax increases and $200 billion in spending cuts (see table 1) are scheduled to take effect. That’s equal to about four percent of GDP, which is, according to the Congressional Budget Office, more than enough to throw us into a recession (more on that later).