Fiscal Cliff

       The fiscal cliff is the $500 billion in tax increases and the spending cuts scheduled to take effect after Jan. 1. The chairman of the Federal Reserve, Ben Bernanke, came up with the term "fiscal cliff" to warn of the dangerous yet avoidable drop-off ahead in the nation’s fiscal path. No matter who you are, we all should be worried about the fiscal cliff. We should be worried about this cliff because if we, the U.S., were to go over the cliff, taxes would increase for the taxpayer and businesses.
     
       This would all lead to much government spending to be cut. One of such spending cuts would be medicare. They would cut medicare spending by 27 percent, about $11 billion. In December 2010, Obama reached a deal with Republicans that extended the tax cuts at all income levels through the end of 2012, that would expire Jan.1, 2013. 

       The AMT (alternative minimum tax) will put taxes on upper level income citizens, in addition to the tax increases that all citizens will be exposed to. Another negative effect that the Fiscal Cliff would bring to the U.S. is the sequester. The sequester is a number of spending cuts that will take place in 2013 if Obama and the house cannot agree on an alternate solution. The Fiscal Cliff would give the government less money to work with while increasing taxes on American citizens. The Fiscal Cliff should be avoided if possible. It will lose the money because of spending cuts and increase the tax on many citizens.