We have been warning for a few months now about the potential consequences of the fiscal cliff -- and adding to the debt by averting it all together. As it turns out, the short-term economic consequences may already be occurring, according to a recent Washington Post article.

The 2012 Fiscal Summit presented by the Peter G. Peterson Foundation is today. Watch live here now and follow on Twitter with #FiscalSummit.

Speakers include former President Bill Clinton, Speaker of the House John Boehner, House Budget Committee Chair Paul Ryan, House Budget Committee Ranking Member Chris Van Hollen, Treasury Secretary Timothy Geithner, Senator Rob Portman, Travelers Companies, Inc. Chairman and CEO Jay Fishman, and former Senator and Fiscal Commission Co-Chair Alan Simpson.

This week’s The Economist offers another analysis of the end-of-year fiscal cliff of tax increases and spending cuts that the United States faces under current law. The article also explores how "the election will determine whether a nasty dose of austerity can be avoided."

The news that Britain has entered into a double-dip recession touched off a fierce debate last week over the role of austerity in the country's downturn.

Federal Reserve chairman Ben Bernanke held a press conference yesterday following the conclusion of the Federal Open Market Committee meeting. Questions spanned a variety of topics including the Fed's current monetary policy stance, the economic outlook, the possible threat posed by European troubles, and Fed transparency. But one question did come up about the fiscal cliff and how the Fed would react if no action were taken. Here are his remarks:

Our recent paper on the fiscal cliff details the short-term or longer-term economic problems that the country will face if lawmakers either allow everything in the fiscal cliff to occur as scheduled or if they decide to extend it all. This blog will look farther into the potential short-term impacts, attempting to quantify what the cliff's 2013 effects would do to the economy.

Richard Haass, the President of the Council on Foreign Relations, argues that the biggest threat to U.S. national security might not be a continent away, but right here in Washington. In an interview with the Daily Ticker, Haass said that domestic issues, including the failure to address rising federal debt, might hinder our international standing in the future. Specifically, he said:

The McKinsey Global Institute recently released a report assessing the efforts of the world’s ten largest mature economies (United States, Japan, Germany, France, United Kingdom, Italy, Canada, Spain, Australia, and South Korea) in deleveraging (essentially, reducing debt) in the aftermath of the great recession.

We noted earlier this week that CBO's current law economic assumptions in the near-term do not look very stellar, especially in 2013 when the economy is scheduled to absorb a large fiscal shock as a large number of tax cuts expire and the "sequester" resulting from the failure of the Super Committee cuts spending automatically across-the-board.

As is the case every first Friday of the month, BLS released its jobs data, which for December showed another solid month for employment. About 200,000 new jobs were added and the unemployment rate fell to 8.5 percent. The underemployment rate, a broader measure which includes workers who have stopped looking for a job and people who are working part-time for economic reasons, fell from 15.6 percent to 15.2 percent in December; this measure has declined by more than a percentage point over the last three months.