One of the problems about the big political fight over the so-called fiscal cliff is that many, if not most, people don’t know what the cliff really means.
Consider, for example, a new poll SHOWING that a plurality of Americans wrongly believe that going over the cliff would result in a spike in the national deficit:
[F]or all the hype about the issue, very few people really understand what The Fiscal Cliff actually is.
To gauge the public level of understanding, we had SurveyMonkey run a poll on the issue…
We wanted to gauge if people understood the result of the expiration of tax cuts and the start of massive, across the board budget-slashing. Recall that the whole point of sequestration is to reduce the national deficit, and that the expiration of tax cuts would give the government even more revenue.
So we asked simply: Were the United States to “go over the fiscal cliff,” what do you expect would happen to the National Deficit?
[T]he correct answer is that “It will decrease.” Going over the Fiscal Cliff would, according to a Congressional Budget Office study, result in a reduction in the National Deficit of $607 billion between fiscal years 2012 and 2013.
However that was not the most popular answer. Per the survey, 47.4% of respondents said that the deficit would INCREASE if we went over the Fiscal Cliff. Only 12.6% think it will decrease.
Technically, there is an argument to be made that the Fiscal Cliff would increase the national deficit because of the impact it would have on the economy. The idea is that the cuts would cause job losses, thus reducing tax revenues, and causing the National Debt to increase. However this is not the expectation of a majority of economists.