Cliff Notes on the Over-Hyped "Fiscal Cliff" Crisis

By Mattea Kramer, Chris Hellman
November 12, 2012  |  They don’t call it the "cliff” for nothing.  It’s the fiscal spot where a nation’s representatives can gather and cry doom.  It’s the place -- if Washington is to be believed -- where, with a single leap into the Abyss of Sequestration, those representatives can end it all for the rest of us.

In the wake of President Obama’s electoral victory, that cliff (if you’ll excuse a mixed metaphor or two) is about to step front and center. The only problem: the odds are no one will leap, and remarkably little of note will actually happen.  But since the headlines are about to scream “crisis,” what you need to understand American politics in the coming weeks of the lame-duck Congress is a little guide to reality, some Cliff Notes for Washington.

As a start, relax.  Don’t let the headlines get to you.  There’s little reason for anyone to lose sleep over the much-hyped fiscal cliff [5].  In fact, if you were choosing an image based on the coming fiscal dust-up, it probably wouldn’t be a cliff but an obstacle course [6] -- a series of federal spending cuts and tax increases all scheduled to take effect as 2013 begins. And it’s true that, if all those budget cuts and tax increases were to go into effect at the same time, an already weak recovery would probably sink into a double-dip recession.