The U.S. economy has always had debt and always dealt with issues of taxes and spending. So, what is this fiscal cliff that we are worried about falling off, and why use such a frightening metaphor? The metaphor is used to describe the effects of the expiring tax cuts and the rise of mandatory spending limits at the end of 2012.
These are topics that should be discussed in your high school government and economics classes, if they haven't been already. While the details of the situation may be intimidating, the basics are not that difficult to understand. All high school students should be able to develop an understanding and an informed position on these matters.
Some of the issues involves are looking at the history of U.S. debt and taxes, what is deficit spending and why is it necessary, what will be the effects of falling off the fiscal cliff.
The metaphor of a cliff seems to imply death, yet the Congressional Budget Office projections indicate that while there is likely to be a short term slow down in the economy that the economy will rebound within a year and that the economy will actually grow faster than it would if the fiscal cliff is avoided. There is debate among economists and social policy experts of which would be better for the economy.
Another issue that could be discussed is whether or not avoiding the fiscal cliff is really a solution to America's economic issues. It is possible that avoiding the fiscal cliff is like putting a band aid on a patient that needs surgery. Solving the issue of the fiscal cliff may simply lull Americans into thinking that all is well and good.
On the other hand, not softening the fall off the fiscal cliff could create a situation similar to the problems faced by counties such as Greece because of the sudden change in the economy. While this sudden austerity may be short term. It's not easy to predict the future, and what if it lasts two or three years or more?
The other possibility is that legislators can develop a partial solution that would reduce the deficit and keep some tax increases so that there is some real improvement in the U.S. deficit without great harm to the economy, but sending enough of a message to the public that something has to change.
The debt ceiling of approximately $16 trillion will be reached soon as well. So, even if the fiscal cliff is avoided and congress figures out a way to make it like jumping off a roof rather than off of a cliff, it still has to deal with the debt ceiling. It's not too early to add that subject to the discussion. What is an appropriate debt limit? We have not seen a debt to GDP ratio as we are experiencing now since World War II. What does that mean? Even if students simply understand what a debt to GDP ratio is, that would be a great education in understanding the factors that congress has to balance.
Perhaps the cliff metaphor is too strong, but what will happen in less than a month now will have an important impact on the economy and high school students should understand the gravity of it all and what the political reasons each party has for its actions in the current debate.
Sources for this topic abound, and opinions are everywhere. It shouldn't be difficult to find fuel, and this seems like a fire that high school students would love to start. The Congressional Budget Office web site is the best place to start for numbers. Try this infographic for starters. You can find opinions everywhere. Everyone has one.