Lemmings Jumping Off the Fiscal Cliff
The fiscal cliff is fast approaching and has become a hot topic these days, but should you care?
Well of course you should.
Similar to the narrowly averted government shutdown we heard so much about back in April, the fiscal cliff is mostly a reminder of how lucky we are to have a government that provides so much for us.
It is a reminder that the government provides so much that a shutdown of its services would paralyze our great nation.
Luckily, there won’t be a government shutdown due to the fiscal cliff. As you can see in the graphic above, there will be an automatic (recessionary) $136 billion in spending cuts. Thankfully, these cuts will be offset by an expansionary $668 billion of tax increases.
So in summary, the fiscal cliff should serve as a good reminder of how terrible a government in paralysis would be, but isn’t anything to worry about this time around.
In fact, we will likely see a nice bump in economic activity due to the additional tax revenues.