The fiscal cliff, an expression coined by U.S. Federal Reserve Chairman Ben Bernanke, is, by name, the Budget Act of 2011, which was a compromise that, according to popular legend, came about by Republicans insisting the White House do some serious curtailing of the federal deficit. In return, Republicans agreed to raise the federal debt ceiling.
Without passing this otherwise routine legislation, the debt ceiling would have been reached, which would have stopped government borrowing, which would, in turn, have stopped the government from paying some of its bills, such as Medicaid and the armed forces, for example.
Vividly, it will be recalled, both Republicans and Democrats were busy accusing each other at the time of "kicking the can down the road," which is to say putting off painful budget adjustments. The Budget Act of 2011 put everyone's money where their mouths were. It calls for an end to the George W. Bush-era tax cuts -- all of them. It calls for an annual spending cut of $136 billion and tax increases valued at $532 billion.
This double-dare-you legislation is one nobody likes.
Economists declare it will send the United States into a second recession, with all the trimmings.
Democrats fear the extra burden on lower- and middle-income families and the cuts in critical entitlement programs.
Republicans fear cuts in defense spending, which is the manner in which they prefer to stoke the economy while pretending not to like stimulus spending.
This broad-stroke stereotyping aside, the bill is a deliberate attempt to stop kicking the can down the road. Should Congress and the White House not agree on a new budget plan by Jan. 1, the law says, then the country will be stuck with these punishing austerity measures.
Just shake your rattle if you spot the ironies here.
There are so many layers of ironies within the ironies and stalling within the stalling that there is, literally, no end to that horrifying nervous laughter that could set in here.
President Barack Obama is leaning on his campaign promise to raise taxes on the rich even though, while sentimentally appropriate, the gains do not stretch far enough.
Republicans are leaning on closing loopholes and hoping that skates them by their nonsensical no-new-taxes pledge.
If the draconian, economy-battering Budget Act of 2011 comes to pass, the federal deficit would be reduced by $1.2 trillion over the next nine years. Too bad, because that would be enough to take care of the budget gap from 2013 alone -- as in one down, eight more to go.
Correct: The austerity bill that is provoking mass hysteria in Washington and in the media would not come close to solving the deficit problem. It is about eight times too weak to do that.
Just imagine if the Budget Act of 2011 Band-Aid bill is that problematic how freakishly untenable an actual solution to the budget deficit would have to be.
Congress and the White House are desperately trying to forestall what turns out to be almost a stall in the first place. The austerity bill that is scaring Washington is laughably insufficient to take care of the deficit. So our lawmakers are trying with heroic efforts to slow it down.
It isn't a fiscal slope -- it is, in point of fact, a fiscal cliff. But Bernanke had the date wrong. The fiscal cliff's birth date is not Jan. 1, 2013. It's sometime in 2001 and it also has a name: The Economic Growth and Tax Relief Reconciliation Act of 2001.
We're living in that old joke in which the fear of falling is nothing compared to the fear of hitting the pavement.
In international markets, the Nikkei 225 index in Japan was flat, rising 0.13 percent, and the Shanghai composite index in China fell 1.03 percent. The Hang Seng index in Hong Kong dropped 1.19 percent and the Sensex in India slipped 0.18 percent.
The S&P/ASX 200 in Australia rose 0.57 percent.
In midday trading in Europe, the FTSE 100 index in Britain climbed 0.15 percent while the DAX 30 in Germany added 0.93 percent. The CAC 40 in France gained 0.7 percent and the Stoxx Europe 600 was up 0.46 percent.
Don't panic, stocks will rebound