Falling over the fiscal cliff would spark a catastrophic recession, damaging the economy for perhaps 13 years, says Jay Timmons, president of the National Manufacturers Association.
"It's already having an impact," Timmons told Yahoo. "We've seen so many of our manufacturers basically stop in their tracks because they're not sure what's going to happen at the end of the year, because the uncertainty is so great."
While GDP growth accelerated to 2 percent in the third quarter from 1.3 percent in the second, that improvement will soon be erased, Timmons says. The NAM sees a 0.6 percent dip for GDP in the fourth quarter.
Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.
And a fall over the fiscal cliff would spark an economic downturn worse than the Great Recession of 2007-09, Timmons says.
"If we fall off the fiscal cliff, or as I call it 'an abyss' because you have no idea what's below, our [research] shows about a 13 percent cumulative falloff of GDP between now and 2015,” he says.
“It will take the better part of a decade, after 2015, to come out of the shock that we'd find ourselves in."
Another industry association, The Financial Services Roundtable, also is deeply concerned about the fiscal cliff.
Its members “unanimously agreed the fiscal cliff is imposing a negative drag on business lending, hiring, spending, and investment right now,” the group wrote in a letter to Congress.
Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.
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