Topic: Alan Simpson

The hosts analyze the impending "fiscal cliff," involving the expiration of Bush-era tax cuts and the onset of sequestration. They play clips of Erskine Bowles and Alan Simpson explaining the potential for a stock market crash and a return to recession. The segment explores how both political parties might view "going over the cliff" as a tactical advantage.

Alan Simpson criticizes the home mortgage interest deduction, arguing it primarily benefits the wealthy and should be capped. In a separate story, Nevada City, California, implements a program to issue permits to homeless individuals, allowing them to sleep in public spaces.