The Economics of the Fiscal Cliff
As 2013 gets closer, the calls get louder to reverse earlier decisions by the US government and Congress that would lead to public spending cuts and higher tax rates beginning next year. The United States is moving towards a “fiscal cliff” we are told which would bring down the American economy because of the massive “extraction” of funds. What is behind these claims? What are the determinants of public debt, the essentials of debt management and where is the economy headed?