spending

Understanding the Fiscal Cliff

fiscal cliff political cartoon

What is the fiscal cliff?
Investopedia defines Fiscal Cliff as "a combination of expiring tax cuts and across-the-board government spending cuts scheduled to become effective Dec. 31, 2012." It is thought that by not extending certain tax cuts and by having an automatic decrease in government spending the country will be sent back into recession due to decreased household incomes and a potential for increased unemployment.