We are trapped in a Roadrunner cartoon

It’s a term every economist uses sooner or later: The fiscal cliff. So what is it?

We are right now enjoying George W. Bush’s income tax cuts, as we have for the past ten years. They’re cuts that were designed to bring the economy roaring back so that in ten years we wouldn’t need them. But the ten years are up in 2013.

We’re also enjoying Barack Obama’s social security tax cut. Which made everyone’s paycheck fatter so that consumer spending would come roaring back. That too is up in 2013. Because at some point, you need money to pay Social Security.

And then you have huge federal budget cuts scheduled to take effect – at the insistence of House Republicans – who demanded automatic cuts as their price for approving an increase in the debt ceiling.

Everybody wants budget cuts, but they do throw people out of work – at the very time that emergency unemployment benefits are set to expire. Add it all up and GDP next year will automatically drop 3.5 percent, which the GAO says will throw us into recession for the first six months of next year.

Ben Bernanke has said even he can’t print enough money to prevent this, unless Congress acts.

It’s a Roadrunner cartoon. There’s a fiscal cliff up ahead. Congress knows it’s there, and that we’re about to run past the edge, but they think ‘well it’s a cartoon, and we can remain suspended in space as long as we don’t realize we are.’ Because politics runs on the same principle as cartoon gravity. No one falls as long as they can resist the temptation to look down.

In fact, they may even have time to turn around and beat it back to the cliff. Which of course is when the cliff itself falls.