In late 1999, the world went into a spin over Y2K, the millennium bug triggered by the arrival of the year 2000, threatening global chaos. In late 2012, investors have the "fiscal cliff" to worry about: a package of US federal tax cuts that expire on New Year's Day 2013, forcing Americans to pay more tax.
At the same time, a number of automatic spending cuts, from defence to public health, also kick in. This, the naysayers predict, will lead to US financial ruin with dire implications for global growth.
Why is the so-called fiscal cliff being flagged as more significant for the US economy than the recent presidential elections?
At present, the US government debt burden is believed to be above US$16 trillion - perilously close to the US$16.4 trillion debt ceiling. The debt burden is a can that has been kicked down the road by successive US administrations, with Congress raising the debt ceiling as and when required. The main preoccupation of American leaders over the past five years has been to pull the economy out of its slump. And stimulating growth requires governments to spend money, through tax cuts encouraging consumers to spend, or via company incentives to hire workers.
The fiscal cliff threatens growth prospects by doing the opposite: taking dollars from consumers' pockets and company coffers and transferring them to the US Treasury. The full effect, if allowed to run for the year, would reduce the 2013 deficit by half.
It is a sign that the US is addressing its national debt burden. But its timing is questionable and the fiscal cliff threatens to become a political time bomb given the fragile state of the US economic recovery.
The facts are that a combined "normalisation" of tax rates and new public spending cuts next year would remove US$650 billion, or about 4 per cent of gross domestic product, from the economy. For an economy growing at an annual rate of 2 per cent as of the third quarter of 2012, this spells disaster and would plunge it into recession next year.