For months now, Americans have been reading and hearing about the so-called “fiscal cliff”
— what happens to the U.S. economy if the Bush-era tax cuts are abolished, coupled with automatic federal spending cuts set to take effect at the end of 2012, assuming President Barack Obama and Congress don’t reach some kind of deal before Jan. 1.
Who gets the credit, or the blame, for coining the name of this panic-inducing issue that so fascinates the news media?
Do we know who first used the term “fiscal cliff?”
Although Federal Reserve Chairman Ben Bernanke has been credited with originating the term when he addressed the House Financial Services Committee on Feb. 29, 2012, he was not the first to use the term fiscal cliff.
According to CNN Money, New York Times reporter Walter Stern used the term way back on Oct. 20, 1957, in an article about the danger of deciding to buy a home because tax rates are low.
The first sentence read, “To the prospective home owner wondering whether the purchase of a given house will push him over the fiscal cliff, probably the most difficult item to estimate is his future property tax.”
So Bernanke took the phrase from a 1957 New York Times article?
Probably not. U.S. Sen. Jim DeMint, R-S.C., used the term in a press release describing a new $700 billion spending bill proposed by the infant Obama administration.
“I have a lot of respect for President-elect Obama, but growing Washington with runaway spending is not change, it’s more of the same,” said DeMint. “If federal spending actually created economic growth, our economy would be booming right now. We are trillions of dollars in debt and Obama's massive new spending program threatens to send our nation over a fiscal cliff, leading to higher taxes and fewer jobs.”
So then, Bernanke got it from DeMint?
Not so fast. Turns out, a scant two weeks before Bernanke’s use of the term, the Reuters news agency carried a story with a headline saying, “Geithner: year-end fiscal cliff to hit U.S. growth.”
The story said U.S. Treasury Secretary Timothy Geithner believed the economy would suffer if all the tax cuts enacted under President George W. Bush were abolished, along with the automatic federal spending cuts that were set to take effect at the end of 2012. Most likely Bernanke borrowed the phrase from the Reuters story.
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