Let’s Jump off the Fiscal Cliff!

Bank CEOs want you to think reducing the deficit requires avoiding the fiscal cliff. Don’t believe them.

By Matthew Yglesias  |   Posted Monday, Oct. 22, 2012, at 4:48 PM ET

The phrase “fiscal cliff” is on everyone’s lips in Washington these days. Voters have heard so many deficit scare stories over the years that it’s easy to assume that this cliff everyone’s talking about involves the deficit getting scarily big. But it doesn’t.

In fact, the “fiscal cliff” is the exact opposite of that. The cliff is a potential set of macroeconomic problems caused by the budget deficit becoming too small. If you’re confused, that’s no accident. Powerful actors, including the executives of America’s largest banks, are deliberately trying to befuddle Americans about this issue. Their aim isn’t to advance the cause of fiscal responsibility: It’s to lower their own taxes and perhaps obtain substantial cuts in Social Security and Medicare and to try to do it by stealth during the lame duck session of Congress.