The fiscal cliff is a hoax, according to Paul Craig Roberts, American economist and former assistant secretary of the Treasury during the Reagan Administration.
“The fiscal cliff is a hoax because the amount of revenues that the government is speaking about, total revenues that would come from tax increases and spending cuts is a very, very small part of the annual budget deficit and the cumulative buildup of the national debt,” Roberts said.
“Their speaking about cutting or raising taxes for a total of about $120 billion per year. But the annual budget deficit is over $1 trillion per year, so at best the cuts are only 10% of the annual budget deficit and therefore they will not stop the buildup of the public debt,” Roberts explained.
Experts say Congress needs to enact at least $4 trillion in deficit reduction over 10 years to start curbing the growth in debt, according to CNN.
U.S. congressional leaders said Sunday, Dec 30 they remain deadlocked over some "pretty big issues" in their last-gasp bid to craft a yearend deal to stop the economy sliding off the so-called "fiscal cliff," according to the AFP.
Budget experts in Washington are dubious that the White House and Congress can reach an effective fiscal deal that would accomplish long-term debt reduction.