Surprisingly few people actually know what the going over the fiscal cliff would do to the U.S. deficit, according to a survey.
With less than a month until the end of the year, coverage of the fiscal cliff talks have been all over the news, making it hard for someone not to have heard about it. Yet, despite the wide coverage, a survey by Business Insider revealed that people are woefully misinformed about what affect the fiscal cliff will have on our national deficit.
The online news site posed one simple questions: “Were the United States to ‘go over the fiscal cliff,’ what do you expect would happen to the National Deficit?”
Keep in mind, the so-called “fiscal cliff” is the result of a host of tax cuts expiring the same time that the government slashes spending. Ultimately, this means that the U.S. government will receive even more money and spend a lot less of it. The point is to reduce our terribly large national deficit — currently at $16.341 trillion.
Yet, almost half (47.4%) of the respondents to BI’s survey said that going over the fiscal cliff will increase our national deficit. Another 28.1% admitted they have no idea what would happen.
To be fair, there could be some confusion since going over the fiscal cliff would very likely push the U.S. into another recession.
“Technically, there is an argument to be made that the Fiscal Cliff would increase the national deficit because of the impact it would have on the economy. The idea is that the cuts would cause job losses, thus reducing tax revenues, and causing the National Debt to increase. However this is not the expectation of a majority of economists.”
Although President Barack Obama and House Speaker John Boehner seem unwavering in their demands, in all likelihood it’s just posturing until the deadline is upon them and they both agree to concessions to pass a deal.
BI reported that political insiders among the White House and congressional Republicans have revealed that the deal will most likely include $1 trillion in additional tax revenue over the next decade with the Bush tax cuts expiring for those earning more than $250,000. Plus, there will be around $1 trillion in spending cuts, including $400 billion to Medicare.
The White House has asked for the removal of the debt ceiling, but what is more likely is that a deal will be made to raise it now and avoid another fight not-too-far down the line.
Unfortunately, the deal might not happen until January:
“…both sides can tell constituents that they did not vote to raise taxes (because taxes will have already gone up), but, instead, voted to cut taxes and spending.”
To read more details about where the two sides are at right now, click here.