27
Dec
12

I finally learned what the fiscal cliff is

The fiscal cliff is a roughly 600 billion dollar reduction in the predicted deficit of 2013 compared to the deficit of 2012. How this got named a fiscal cliff I have no idea. The 2001, 2003 and 2010 extension of the Bush tax cuts expire in 2012 and are responsible for 44% of the overall cliff. 

I knew nothing about the fiscal cliff before reading this fantastic CRS report. And I found out that the name is very deceptive. What’s the cliff? It’s just a deficit reduction. In other circumstances, we would be happy about it. 

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