Would The Recovery Survive A Fall Off The Fiscal Cliff?

Many liberals are arguing that temporarily jumping over the fiscal cliff wouldn't have major economic consequences. Neil Irwin isn't so sure:

Markets don’t like risk. And for the world’s largest economy to adopt a yo-yo approach to fiscal policy — steep tax increases and spending cuts one month, a reversal the next — would be an extra layer of risk for already jittery markets. A falling stock market hammers both households’ wealth and confidence and businesses’ willingness to invest.

Who knows if a few weeks of austerity would cause a recession or merely a soft patch in growth. But with unemployment at 7.9 percent, neither is particularly welcome.