Spoiler alert: The “fiscal cliff” will be resolved. At the 11th hour, saner heads will prevail, a deal will be struck, and the U.S. Congress will steer the economy away from its date with destruction. Congressional compromise will ensure that the scheduled tax increases and spending cuts are pared back and phased in only gradually.
The real danger, then, is not that we’ll fall off the cliff. It’s that Congress will solve the problem badly, missing a once-in-a-generation opportunity to design a better tax system.
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