Where do you see this?
In economic news reports, and financial news on the United
States economy.
What does it mean?
The phrase 'fiscal cliff' is being used to describe a series of
events that will happen simultaneously that could put the US
government in a very difficult position at the end of this
year.
These include the expiration of income tax cuts, payroll tax cut
and other important tax-relief provisions.
At the same time, the first instalment of the US$1.2 trillion
(S$1.5 trillion) across-the-board cuts of domestic and defence
programmes could kick in. These cuts were agreed as part of the
negotiations that helped to raise the US government debt ceiling
last year.
Why is it important?
If these tax increases and spending cuts take effect, the
government could save nearly US$600 billion starting next year.
But the impact of such measures on the economy would be huge,
and could potentially send the US into a major recession, said the
US Congressional Budget Office.
What's more, the closer the global economy heads to the fiscal
cliff, the more jittery markets will get, especially if there are
no signs that US lawmakers will come to a new deal.
This, in turn, could spell turmoil in the markets.
So you want to use the phrase. Just say...
"Even if markets have settled to a calm over euro zone debt
crisis, the worry over the US fiscal cliff could trigger more
volatility ahead."
invest, The Sunday Times, July 22 2012, Pg 35