To me, this is roughly what the fiscal cliff is about: The government's income is 17 percent of Gross Domestic Production while its expenses are 24 percent of GDP. Our government is dealing with this disparity by: 1. borrowing money from China, 2. printing money, and 3. raising taxes.
None of these measures prevents the national debt from rising. Put in annual household terms, you earn $60,000, you spend $84,700, and you already are in debt $317,600 to which you must add $24,700, now totaling $342,300. Next year you will earn $61,000, spend $86,100 and you will then add $25,100 to your debt. You then owe $367,400. Could you sustain these circumstances?
This national situation is not sustainable and both parties know it. Yet the two political parties are supported by competing constituencies that object to compromise. So the situation is slowly moving toward a climax.
The term "fiscal cliff" may have been invented to scare the supporters of both parties into allowing their politicians to concede enough to at least not add to the debt we already have.