Fiscal Cliff Resolution

It looks as though our political leaders have come to agreement on a plan for resolving our federal government’s fiscal problems.  The key elements of the plan (source) are:

• Reversion of the Alternative Minimum Tax thresholds to their 2000 tax year levels; 
• Expiration of measures delaying the Medicare Sustainable Growth Rate from going into effect (the "doc fix"), as extended by the Middle Class Tax Relief and Job Creation Act of 2012(MCTRJCA); 
• Expiration of the 2% Social Security payroll tax cut, most recently extended by MCTRJCA; 
• Expiration of federal unemployment benefits, as extended by MCTRJCA; 
• New taxes imposed by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010;
• Expiration of the Bush tax cuts extended by President Obama in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 and 
• Across-the-board spending cuts ("sequestration") to most discretionary programs as directed by the Budget Control Act of 2011. 

The net effect of the plan (source) would be as follows.  The year-over-year changes for fiscal years 2012–2013 include a 19.63% increase in tax revenue and 0.25% reduction in spending. These changes would return tax revenue to approximately its historical average of 18% GDP, while continuing to spend at dollar levels held approximately the same since 2009.^[2] Some major programs, like Social Security, Medicaid, federal pay (including military pay and pensions), and veterans' benefits, are exempted from the spending cuts. Spending for federal agencies and cabinet departments would be reduced through broad, shallow cuts referred to as budget sequestration. 

image from www.chronicleoftheoldwest.com,  modified with "?" by Keith

The above plan is actually what is being popularly referred to as the "fiscal cliff".   Would it really bring on the disaster that our financial institutions would have us believe?   Maybe the ones falling off the cliff would be  the heads of the big financial institutions...