Why is it called fiscal cliff?

The term started being used in the context of the expiration of the Bush tax cuts in 2010. In 2011, the term started to be used to refer to the point at which tax cuts would expire, and spending cuts would be triggered, that would have occurred in 2013 under a fiscal-cliff scenario.

Is fiscal a deficit?

The fiscal deficit of a country is calculated as a percentage of its GDP and for the current financial year, the government expects the deficit at 6.8% of GDP. In simple terms, it is the shortfall in the government’s revenue compared to its expenditure or when the government spends beyond its income.

What does fiscal prudence mean?

Whatever people’s values and choices about government and the budget, in the long run many widely shared policy goals that require federal spending will be unattainable if the budget is not on a sustainable path. Suggested Citation:”3 Fiscal Prudence.” National Research Council. 2010.

What is the fiscal cliff and what caused it?

Fiscal Cliff Explanation and Causes. The fiscal cliff is a combination of five tax increases and two spending cuts that were scheduled to occur on January 1, 2013. If Congress hadn’t taken action in time, taxes would have increased and government spending would have been drastically reduced in one day.

What is a’fiscal cliff’?

What is a ‘Fiscal Cliff’. The fiscal cliff refers to a combination of expiring tax cuts and across-the-board government spending cuts that was scheduled to become effective December 31, 2012.

How will the’fiscal cliff’affect small businesses?

The “fiscal cliff” is hampering everyday operations of small businesses and clouding their outlook for growth. In a fresh offer aimed at resolving the “fiscal cliff” standoff, President Barack Obama seeks $1.2 trillion from higher tax revenues, including higher rates on those earning more than $400,000 a year.

Who coined the term’fiscal cliff’?

Who actually first uttered the words “fiscal cliff” is not clear. Some believe that it was first used by Goldman Sachs economist, Alec Phillips. Others credit Federal Reserve Chairman Ben Bernanke for taking the phrase mainstream in his remarks in front of Congress.