For months now Americans have been listening and reading about President Obama and the lawmakers in Congress volley back and forth about the U.S. falling off the “fiscal cliff” if a deal isn’t made by the end of 2012. Below is a primer about the issue and what it all means to the average American.
Who came up with the term “fiscal cliff?”
Although Federal Reserve Chairman Ben Bernanke has been credited with coining the phrase while addressing the House Financial Services Committee on Feb. 29, 2012, he wasn't the first to use the term.
According to CNN Money, New York Times reporter Walter Stern used the phrase way back on Oct. 20, 1957. In an article about the danger of deciding to buy buying a home based on low tax tax rates of Low Rates Beware of Rising Taxes, the first sentence reads, “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 NY Times article?
Probably not. Republican Sen. Jim DeMint of South Carolina in a press release used the phrase in a descriptive way about a new $700 billion spending bill proposed by the 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 he got it from DeMint?
Not so fast. Turns out, a scant two weeks before Bernanke’s fateful use of the phrase, the Reuters news agency produced a headline - RPT-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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