Fiscal cliff意思

"Fiscal cliff" is a term used to describe a situation in which a government's budget reaches a point where tax increases, spending cuts, or both, are triggered abruptly, potentially leading to an economic crisis. This term became popular in the United States in 2012 when the country faced a combination of expiring tax cuts and automatic spending cuts that were scheduled to take effect at the beginning of 2013.

The fiscal cliff in the U.S. was a result of the Budget Control Act of 2011, which was passed in the aftermath of the debt ceiling crisis. The act included automatic spending cuts, known as sequestration, that were meant to take effect in 2013 if Congress failed to agree on a budget plan to reduce the federal deficit. At the same time, the Bush-era tax cuts were set to expire, and the payroll tax holiday was scheduled to end, which would have resulted in an increase in taxes for many Americans.

The combination of these tax increases and spending cuts could have led to a significant reduction in economic growth, potentially pushing the economy back into recession. To avoid this, Congress and the President negotiated a deal that would delay the spending cuts and modify the tax increases, which became known as the American Taxpayer Relief Act of 2012.

The term "fiscal cliff" is not limited to the U.S. and can apply to any situation where a government faces a sudden and significant change in its fiscal policy, potentially leading to economic instability.