Dislikedbasically the cliff will drain liquidity from the system via taxation and cutting projected spending.
with the environment that we have right now with slow growth 1.5% YoY, and the employment 7.7% velocity of money actually falling.
I fail to see how going over the cliff is a good thing.
raising taxes on people will reduce the capacity to spend ....we already have weak aggregate demand.
with spending cuts there will be less money going into the system which will cause monetary contraction......again this is known to cause deflation and depress...Ignored
The contraction that you fear has to happen if we are to cut spending, which is the real issue...... the economy has been pumped up for the last 4 years with no light at the end of the tunnel..... your figures are fictitious, the growth is subsidized, unemployment is a joke as it does not reflect the millions under employed or not counted as they have lost their unemployment benefits.
regards
edit, it looks like it's going to pass on a democratic vote, republicans appear to be split,
good luck...its a good place to learn here in ff..but..just remember...your charts are more important...