The fiscal cliff is the conundrum likely to face the United States government towards the end of the year if the terms that are in the act of budget control becomes implemented (Thurm, 2012).
2. What was the fiscal cliff supposed to produce? Why do you think it has failed so far?
The fiscal cliff is supposed to bring to an end the temporary cuts on payrolls which is supposed to increase tax for the workers by 2%. It is supposed to end some business tax breaks, cause shifts in minimum taxes to have a larger tax portion, and bring an end to all tax cuts. In addition, the cuts on spending that were agreed upon being part of the ceiling deal will take effect. I think it has failed so far because the situation’s urgency was underscored. Some business groups have contributed to the failure of the fiscal cliff since they have called requesting to avoid the cliff. The fact that if the nation goes over the cliff most of the companies would suffer has caused the failure of the fiscal cliff. There is looming fear that it will lead to slow economic growth and the United States might go to recession therefore, people do not want to implement it (Thurm, 2012).
3. Do you think the U.S. will go off the fiscal cliff or do you think Congress will address the problem before then?
I do not think the Unites States will go over the cliff. I think the congress will be able to address the problem before then. This is because if the nation goes over the cliff there is likely to be an economic disaster. It is possible for the congress to address the problem because he can even act to change the act even after the deadline. Since the congress is aware of the economic problem that would rise if the nation goes over the cliff he will probably act to address the problem.
Thurm, S. (2012). Firms Hit Brakes Before Fiscal Cliff. The Wall Street Journal, A6.