The "fiscal cliff" is a politically manufactured crisis that is more like "steps," Zerlina writes in a piece at Ebony [5], adding that Americans can rest assured that the end of the world is not upon us if a deal between House Republicans and the president isn't reached by the deadline on Dec. 31.
First of all, it's important to understand that the "fiscal cliff" is a politically manufactured crisis and that it isn't actually a cliff at all. It's more like "steps" or as MSNBC's Steve Kornacki [6] explained, a "fiscal slope." Thus, the breathless coverage in the media is somewhat misleading. If a deal between House Republicans and the president isn't reached by the deadline on December 31st, rest assured that the end of the world is not upon us.
However, a few things will happen on this much talked about December 31st deadline. First, the Bush tax cuts will expire. All of them. At the same time, as a result of the sequestration deal last year, spending cuts also are triggered [7]. Non-partisan experts warn that this combination oftax increases and spending cuts [8] could send the economy back into another recession if left unresolved.
Ordinary Americans would feel an impact from the tax increases immediately [9], as payroll taxes and the alternative minimum taxes go up. The unemployment rate could go back up to over 9% and economic growth could be reduced by 0.5%. And, of course, the stock market would not react kindly to this level of instability in the American economy.
Read Zerlina Maxwell's entire piece at Ebony. [5]
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