A whole lot, unfortunately, when it comes to the fiscal cliff. It's no longer a far-off worry; it's happening right now, and the actions taken over just the next few days will directly affect you right away, writes MoneyShow personal finance expert Terry Savage.

It’s down to the wire, and they don’t seem to be taking it seriously in Washington. At least not seriously enough to come up with some middle ground that will change the trend of huge deficits and increasing government spending.

Of course we all know the real solution: Economic Growth. A growing economy would reduce the need for government spending on unemployment benefits and to help the needy. And it would automatically increase tax receipts, because more people would be working and paying taxes into the government.

Instead, what they’re debating is a huge philosophical and political difference over the role of government in America.

On the one side, you have those who firmly believe that the economy would grow if only government would get out of the way. And on the other side, you have those who equally firmly believe that the only way the economy can grow is if government intervenes to help.

It’s no wonder that there can be no agreement, no compromise, no solution. So here’s a closer look at what would really happen if, like Thelma and Louise, they lock hands and jump over the edge.

The Debt Ceiling
This is one of the two most critical issues we face immediately. We will bump up against the official $16.394 trillion debt ceiling by the end of this week! If the government can’t borrow, it can’t pay its bills or salaries, or refinance the Treasury bills, notes, and bonds as they come due.

But Treasury Secretary Geithner has announced they can “borrow from other trust funds” to keep government going into mid-February. Of course, if a corporate executive did this kind of financing, he would go to jail!

Unemployment Benefits
The lack of a deal will have a serious and immediate impact on the 2.1 million people currently receiving extended jobless benefits. (States pay the first six months, and the government has continued those benefits for at least 99 weeks of unemployment.)

If no deal is reached, checks will stop on December 29. And an additional 1 million unemployed will lose their benefit checks over the subsequent three months.


Your Paycheck
If you’re working, you will immediately see less money in your paycheck in the New Year, for two reasons.

First, the so-called “Bush Tax Cuts,” on which your tax rate and withholding are based, will go back to pre-2003 levels. That higher tax will start to come out of your paycheck immediately. Perhaps even more devastating to your paycheck amount, the “payroll tax holiday” (the Obama cut in Social Security taxes or FICA) will end, resulting in an additional 2% taken out of your gross pay.

Bottom line: You will have less money to spend. The government will spend it for you.

Your Tax Refund
The refund you expect may turn into a bill for more taxes. That’s because the “Alternative Minimum Tax," which makes sure that “rich” people don’t get too many deductions, will have to be calculated for your 2012 income. An estimated 28 million more taxpayers will face this new, higher tax bill.

Your Doctor
Starting in January, Medicare reimbursements to physicians will be cut by 27%, or $11 billion, unless an agreement is reached to extend the current payment levels. Many physicians may decide not to accept new Medicare patients.

State Poverty Programs
The federal government annually sends hundreds of millions of dollars to state and local governments. That spending would be cut immediately if no deal is reached—impacting programs ranging from school lunches to nursing-home subsidies.

Government Jobs
Without a deal, expect notices of job cuts and pay cuts—civilian and military—giving the media graphic ways to illustrate the plight of government workers and the impact on national defense.

These are just the most immediate and visible ways the “fiscal cliff” will impact you, your family, and our country. They are planning a dangerous game of “chicken” in Washington, DC.

There’s some sense that both sides will be willing to actually go over the cliff—head off for vacation, and then let a new Congress deal with the mess in January. That would leave everything from payroll tax schedules to business expansion plans in limbo, likely causing a dramatic and immediate slowdown in the economy. A recession.

The real question is whether going over the cliff would actually be better than any deal the two sides might agree upon. We’ve spent an “extra” trillion dollars every year, above what the government has collected in taxes, to get the economy going. And we have a very lame recovery.

Will more government spending fix that problem? Will an agreement to tax the wealthy raise enough money to solve our deficit problem—or will it destroy incentives and slow the economy?

If we don’t learn from history, we will certainly be forced to learn our answers the hard way—by living through this reality check. And that’s The Savage Truth.