Fiscal Cliff

Fiscal Cliff

The fiscal cliff is a combination of expiring tax cuts and government spending cuts scheduled to become effective Dec. 31, 2012. The fiscal cliff was put in place the last time the debt limit was raised.  The thought was that the combination of both across the board tax cuts expiring and cuts in government spending would be so detrimental to the already fragile economy that Congress and the President would address the issue to prevent the economy from falling into a recession. The fiscal cliff will cut household incomes, increase unemployment, and weaken consumer and investors confidence.