As Calculated Risk (and many others) note, the term ‘Fiscal Cliff’ is a misnomer. The US economy is not going to fly off a cliff and implode on January 1 if we don’t make a deal. There will be a drag due to higher taxes and lower spending, but much of that can and be wound back early in the year.
But the talk about the fiscal cliff has grown into a deafening roar, and here’s proof that it’s way out of proportion.
Matthew Fleury of Bank of America takes a look at the volume of articles mentioning The Fiscal Cliff and The Debt Ceiling:
As you can see, there’s WAY more talk about the Fiscal Cliff than there was at the peak of the debt ceiling!
The debt ceiling standoff really was a threat to plunge the US into the abyss, as a default (which could have happened) would have inflicted untold damage onto the global financial system.
A recession is far less worse, and it’s not even guaranteed, and the deadline is far less hard.
SEE ALSO: Krugman tells Obama not to make a deal >
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