The so-called "fiscal cliff" refers to the expiration of the Bush tax cuts on December 31, 2012, along with a series of spending cuts that will be triggered on that same date. It is called a cliff because the change will not be gradual, but steep and dramatic.Economists estimate all of the tax and spending measures together will take a total of $500 billion out of the U.S. economy in 2013. That will certainly sting, and many worry it will trigger a double-dip recession. Why are we facing this fiscal cliff? The situation is the result of a compromise plan that President Obama and Congress agreed to last summer that ended the debt ceiling debate, or rather, put it on hold. Meanwhile, organizations such as the IMF have advocated that Congress take a less aggressive approach to debt reduction that would mitigate the short term pain that woud be inflicted on a fragile economy. Congress has not taken any action. On the other hand, a growing number of Democrats -- Howard Dean included -- are arguing that we ought to go "over the cliff" as planned. Cut spending and let the tax cuts expire, they argue. This will undoubtably hurt the economy in the short term, but these proponents argue it is necessary to inflict some pain in the short term in order to get our fiscal house in order. Directed / Produced byJonathan Fowler and Elizabeth Roddhttp://bigthink.com/
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