How the Fiscal Cliff Could Hurt America

Along with tax increases come job losses and reductions in services.

The Capitol dome is seen on Capitol Hill in Washington, Tuesday, Dec. 11, 2012, as Congress works on avoiding the fiscal cliff.

In addition, the fiscal cliff would cause reductions in the federal emergency fund used to rebuild roads damaged by Hurricane Sandy. Rail travel would also take a hit, as Amtrak is set to lose $131 million.

Innovation destroyed, with short-term pain for all. Shawn Ritenour, a professor of economics at Grove City College near Pittsburgh, says the fiscal cliff would also take money away from companies that drive innovation.

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"More resources are being left out of the hands of capitalists and entrepreneurs," Ritenour says, adding that short-term pain is likely for the U.S. economy—no matter the outcome of the fiscal-cliff negotiations.

Fort Pitt's Bovard says this pain would be more acceptable if Washington could come up with long-term plans to control federal spending, while providing a clear blueprint for national fiscal policies. 

"When do we take our eyes off who's going to beat the other person and say, 'How do we fix this issue'?" Bovard says, referring to political squabbling. "If you can share the pain across the board, we can get things moving in the right direction a whole lot faster. At the same time, it pulls everyone together."