Define: Fiscal Cliff

By Gilmarie Brioso on January 2, 2013



I am a stranger to many worlds, the world of stock markets and commerce, the world of political parties and legislative bills. I have tried to make myself available to outlets that allow me tap into these worlds. I read the The New York Times daily and peruse through Business Insider often, sites, magazines and newspapers that might grant me some sort of access. Still, there is much that I miss or simply do not understand.

Recently, there has been much media coverage on the fiscal cliff. But despite the many news articles on the matter, there are none that seem to define the term to their readers. In doing so, said articles tend to leave their audience with more questions than actually provide information and/or opinions that communicate with readers.

It makes me wonder, why do we live in a world that just assumes? Assumes that terms, like the fiscal cliff or the meaning of the word American, can be stated without an explanation of the intricacies that lie within them.

In order to placate my frustrations, I decided to turn to my dear friend Google and typed in three simple words—Define: Fiscal Cliff.

This is a great trick that I use often in my information-seeking pursuits, ranging from various fields such as vocabulary (ie. Define: Labyrinth), political concepts (ie. Define: Hegemony) and foreign words (ie. Define: Pomodoro).

It’s great because, before the lists of links to dictionaries, research and articles, Google displays a simple definition at the top of the page.

If it is a satisfying one, then you can immediately move on to what it was your were working on, a quick and painless process.

Define: Fiscal Cliff led me to an About.com page in which Thomas Kenny states:

“‘Fiscal cliff’ is the popular shorthand term used to describe the conundrum that the U.S. government will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect.”

Monday night, a deal was made that would raise taxes on 77.1% of households in the United States. “Bloomberg reports, ‘More than 80 percent of households with incomes between $50,000 and $200,000 would pay higher taxes.’” A 2% payroll tax cut, enacted during the economic crisis, is also being allowed to expire.

Overall, the agreement is good news to some. So what was the big fuss and concern that cause many, myself included, to go into a slight misunderstood state of panic?

It seems to me that much of this panic was caused by the great delay in dealing with the matter. The Senate had 507 days, “since the August, 2011 debt ceiling agreement,” to address the problem, yet it wasn’t until three hours before the deadline that they agreed to a deal.

We have, therefore, technically gone over the cliff since the final details won’t be settled well into the New Year and The House of Representatives still needs to approve the deal. This will definitely be a burden on the economy and financial markets.

 

So that’s the basic ordeal with matters concerning the fiscal cliff. Pretty simple, huh? Now you can go on reading those New York Times and Business Insider articles actually knowing what they are talking about.

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