Brace yourself for huge tax increases coupled with drastic spending cuts, which is going to happen on Jan. 1 or 2 unless a deal is made to prevent the so-called fiscal cliff.

The fiscal cliff is the shorthand term for the set of tax and spending policies that end this year. Bush-era tax cuts were originally intended to end a decade later, but were extended in December 2010 for two more years. Now, time is up, and if the cuts expire, everyone’s taxes will increase.

In mid-2011, Congress passed a Budget Control Act, which asked a joint congressional committee to produce legislation to decrease the deficit by $1.2 trillion over 10 years. If no agreement was reached, automatic, across-the-board cuts, split evenly between defense and domestic spending, would take place ”“ beginning Jan. 2.

Since those on both sides of the political aisle could not find agreement, the taxes and the cuts are both about to occur. People and businesses will suffer in a slowly recovering economy that could tank if this is not resolved quickly. It could determine the future direction of the U.S. economy for many years to come.

Time is crucial. Our president and Congress need to work together, to come up with a fair solution. If they do nothing, and allow taxes to rise to pre-George W. Bush levels, the economy might be severely damaged. Cuts to the military and many discretionary programs could harm our defense efforts, even though the deficit would be reduced.

If we continue to spend as much as we do without raising taxes, our debt will grow, crippling our economy in the long run as well as putting Social Security and Medicare in jeopardy.

Instead of these options, both sides need to come together to fix the financial house of our government. Working people, businesses and the economy will falter if we hit a fiscal cliff. Spending is out of whack and needs to be reined in. We owe more than $16.5 trillion in debt ”“ and growing. And we are without a yearly budget.

In the past two years, government has been polarized. Our country has been divided on important issues like taxes and spending cuts, women’s and social issues, education, illegal immigration, same-sex marriage, and the huge, growing deficit. It is still unclear why politicians have not compromised on these issues, and the gridlock continues.

This budget problem has been ongoing for four years, and everyone will feel the pain unless spending is brought under control. You cannot live beyond your means, and the government is no exception. It is deep in debt, way beyond where any business or family should be. The numbers won’t work out for survival if it continues on the same path.

What happens to a country like ours if it goes into bankruptcy? It has never happened before, but governments can see their economies fail. Both the president and our politicians should not let that happen to us.

The administration should include business executives’ inputs in their pre-negotiations, even before they meet with Republicans. Items of mutual interest affecting businesses and their congressional representatives could be discussed. Perhaps businesses can help reverse the prior confrontations the administration had with congressional opponents.

Businesses realize taxes must be revised to reduce the huge debt. To expand investments and create new jobs, businesses want excessive regulations reduced or eliminated and taxes lowered by the administration, in exchange for businesses’ efforts to help get congressional Republicans to be cooperative.

Mutual cooperation and compromise can accomplish wonders, even in government. Both sides could agree to lower taxes on businesses, eliminate many tax shelters and loopholes, raise individual taxes moderately, and make substantial cuts in federally funded programs. Together, such policies could enable the economy to improve, instead of slipping back into a double-dip recession.

Medicare and Medicaid also must change, so these programs can survive before running out of money. It means reductions and revisions ”“ a hard thing to take, but necessary. The federal budget has nearly doubled in the last 10 years. This expansion must be reduced, not by filling new positions, but eliminating jobs as government employees retire or leave those positions.

The only way we can avoid going over a fiscal cliff is if we all pull together to fix our economic problems.

— Bernard Featherman is a business columnist for the Journal Tribune and former president of the Biddeford-Saco Chamber of Commerce.