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'Fiscal cliff' would spark recession, agency says

By Associated Press

POSTED:



WASHINGTON » A new government report says the so-called fiscal cliff would send the economy back into recession and cause a spike in the jobless rate to 9.1 percent by next fall.

The Congressional Budget Office analysis says the combination of automatic tax increases and spending cuts would cut the deficit by $503 billion through next September. But that would cause the economy to shrink by 0.5 percent next year.

The report comes as a newly re-elected President Barack Obama and Congress are seeking ways to avert the problems.

The study estimates that America's gross domestic product would grow by 2.2 percent if the Bush-era tax rates were extended and expand by almost 3 percent if Obama's payroll tax cut and jobless benefits for the long-term unemployed are extended.

The Congressional Budget Office is a nonpartisan agency that performs budgetary and economic analysis for Congress.







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Maneki_Neko wrote:
Our current road leads to disaster. Maybe falling off the fiscal cliff would be hard but we cannot recover until we hit bottom. Do we take the hit or do we kick the can and let our kids and grandkids take the hit?
on November 8,2012 | 11:26AM
niimi wrote:
We need to go over that cliff so that everyone in America will learn a lesson not to mess around with their own finances or the country's.
on November 8,2012 | 12:20PM
gari wrote:
who were the 12 members who stalled the confontation that should have occured last year ...At a minimal we should have a reason from them .
on November 8,2012 | 03:03PM
kainalu wrote:
Too easy: Part A) revert the tax-code for those that earn $200K-a-year or more ($250K jointly) back to what it was before George W. cut them. Sourcing the IRS, less than 3% of those that filed in 2011 fall into that high-income bracket. It begs to question: who are the ignorants from the 97% rest of us that would oppose this idea? It's not "raising" the taxes, it's putting them back to where they were, and it applies only to the wealthiest. Part B) decriminalize marijuana - like the state of Washington. And like the state of Washington plans, tax it at production, retail, and customer. Some anaylst project Washington could add $500-million dollars-a-year in tax revenue - 2-and-a-half Billion dollar$ in 5-years. Colorado has formed a commission to make those same determinations. The Fed could tap into that golden-goose of a tax-revenue, a hemp industry would arise, thousands of jobs, perhaps 100-of-thousands of jobs would be created at all levels - farmer, packaging, retailer, trucker, inspectors, etc. And the final positive boost would be those Federal and local law-enforcement and judicial systems that can now use their resources on more pressing real crimes. It's time for the United States to lose our draconian pot laws.
on November 8,2012 | 04:31PM
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