With the many fiscal cliff countdown clocks now under the three-day mark, the media has gone into full panic mode. A sample of headlines from around the web on Saturday includes:
- "Surprising ways cliff would hit your food, gas costs"
- "What a fiscal-cliff plunge would mean for your taxes"
- "Middle Class Gets 'Cliffed' by Huge Tax If No Deal"
And this doesn't even get into the countless articles with titles such as "How the Fiscal Cliff Affects Your Wallet" and those with metaphors involving the country "going over the cliff." With headlines these - obviously designed to attract attention by frightening readers - it's time for a little perspective. If Congress fails to act by the deadline, it doesn't mean all of the tax hikes and spending cuts scheduled for January 1 will go into effect and remain the law of the land permanently. Congress can, and most likely will, enact stop-gap measures to roll back the worst elements of the law changes incorporated into the "cliff" in the early days or weeks of the New Year. It can also change laws retroactively to January 1 in the weeks ahead if it so chooses.
The bottom line is that the media, which loves to generate ratings and page views via scare tactics, is creating a sense of unnecessary alarm surrounding the deadline. Even if we enter 2013 without a resolution, it doesn't signal the beginning of an economic catastrophe when the sun comes up on January 1. In fact, it may just mark the beginning of truly serious negotiations, since an agreement after the deadline allows lawmakers to claim that they "cut taxes." Keep this in mind as the media steps up its fiscal-cliff frenzy in the days ahead.
Learn more: What is the fiscal cliff?