“Viewpoint” host Eliot Spitzer, David Leonhardt, Washington bureau chief for The New York Times, and Washington Post columnist Ruth Marcus debate whether “fiscal cliff” is a reasonable way of referring to the Jan. 1, 2013, deadline after which a series of federal tax increases and spending cuts will go into effect unless Congress intervenes.
“The combined pieces of this package equal about 4 percent of GDP, so if you imagine that they go into effect and they remain in effect, not just for a couple weeks, but for the full year, then it’s a little bit hard to see how the economy avoids a recession next year,” Leonhardt says. “If we go over for a few weeks it’s not clear if the damage will be so great, but it also is a little bit hard to see how the economy survives next year healthy if it’s not averted in some way.”
“If it gets remedied within two weeks or a few weeks — not healthy, not good, the market could react badly, there’s a lot of uncertainty that drags down growth during that time — but not disastrous in any way,” Marcus says. “If you go a couple weeks off the cliff and it turns out that it’s just dragging on and on and on because you really can’t get to a resolution, then it becomes disastrous and I don’t think anybody really knows, sort of, what happens post-cliff and how quickly it gets resolved.”