I believe the metaphor was partly chosen as a reference to the quick, sudden reduction in the deficit that would result if the so-called Bush tax cuts were allowed to expire (and thus many folks’ taxes go up) and all of these spending cuts mandated by the Budget Control Act of 2011 allowed to kick in as well. Imagine a graph with a line steadily going up, then plunging downward to indicate the deficit reducing. Resembles a cliff.
Of course, the metaphor takes on a much more fatalistic feel when people start explaining the immediate consequences of such abrupt changes, namely a big short-term hit to the overall economy as well as significant hardship to many. I’ve seen articles describing how Congress not acting to avoid the “cliff” would negatively affect pretty much everyone, in particular the lower- and middle-classes, while also having immediate impact on education, health, jobs, local governments, and so on. Rather than simply referring to a graphic representation of the deficit being suddenly cut in half, then, the “fiscal cliff” becomes a kind of impending doom that will necessarily befall many should lawmakers fail to act to extend current policies and delay those mandatory tax increases and cuts to spending.
All is apparently on the table when it comes to these negotiations. In fact, last week The Motley Fool even brought up online poker again as a potential revenue source, kind of obliquely suggesting that some sort of federal legislation regarding online poker could crop up amid the discussions. But with four weeks to go the headlines suggest that an agreement resulting in something other than the “cliff” is still some ways off.
Thus are the talking heads becoming increasingly despairing as the metaphor further evolves into something even more dire. Now the nation is said to be speeding along together in a car with our elected officials fighting with one another over the steering wheel, gear shift, and pedals. We’ve passed a “BRIDGE OUT” sign, but are continuing forward nonetheless. I suppose if nothing changes by the time we reach December 21st -- i.e., the date long targeted by popular yet misguided interpreters of Mayan history and other kooks as having been scheduled for Armageddon -- the apocalyptic tone of “fiscal cliff” references might accordingly increase.
On the Bubble” -- in which I discussed the origins of the term and speculated about its entrance into poker lingo. Real bubbles are so ephemeral, yet the metaphorical bubble seems as though it has become a permanent part of poker tourney talk.
As I allude to in that piece, the term became linked with failed investments or schemes like the “South Sea Bubble” of the early 18th century wherein people saw their investments in a trading company become suddenly worthless. In that context the bubble bursting is a disastrous event for all. But by the time the bubble bursts in a poker tournament, only one person experiences hardship. Meanwhile, for everyone else the moment represents something decidedly more pleasant (and profitable).
Even so, approaching “the bubble” is much, much less anxiety-producing than approaching a “cliff,” wouldn’t you say? Something I assume those who originally thought to use the latter term to characterize the current scenario well knew.