Everything you need to know about the fiscal cliff

If you’ve been paying attention, the term “fiscal cliff” is thrown around so often in the media these days there’s rarely attempts to actually explain what the term means. A quick parenthetical may mention “sequestration” or “automatic spending cuts,” but what is sequestration and where did these automatic cuts come from?

To answer these questions, the crew behind the Washington Post’s Wonkblog have put together an easy-to-understand guide to everything you need to know about the so-called fiscal cliff — or, as they like to call it, the “austerity crisis.”

It’s worth a read, as it lays out the origin of the fiscal cliff in simple terms, the attached tax increases (middle-income families would see their annual tax bill increase an average of $2,000, according to the Tax Policy Center), spending cuts (there are four types of spending cuts that would kick in next year), what’s been attempted to address the issue, and the potential impacts to the economy of going over aforementioned cliff (another recession quite possibly, economic turmoil most definitely).

 

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Whit Richardson

About Whit Richardson

Whit Richardson is Business Editor at the Bangor Daily News. He blogs about Maine business, entrepreneurs and the economy.