The United States is headed straight for recession unless Congress steers the economy away from a sharp fiscal adjustment poised to strike at the end of the year, said Martin Regalia, chief economist of the U.S. Chamber of Commerce.
At the end of the year, tax cuts expire at the same time automatic cuts to government spending kick in, a combination known as a fiscal cliff that will throw the country into a recession if left unchecked by Congress.
“If we don’t figure out a way to finesse this fiscal cliff … if we don’t figure out how to kick this can down the road, we will almost certainly be in a recession,” said Regalia, according to CNNMoney.
Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation
Some estimates see the fiscal cliff siphoning more than $500 billion out of the economy in 2013 alone.
Lawmakers have been unwilling to address tax and spending issues in an election year, though some have suggested Congress could convene in early 2013 and deal with the problem on a retroactive basis.
“Going off the cliff is not a preferred strategy,” Regalia said.
“Going off the cliff will not make the world better for people who are already looking for jobs.”
The nonpartisan Congressional Budget Office estimates that the economy would contract by 0.5 percent next year while unemployment rates would rise to around 9 percent by late 2013 if lawmakers fail to steer the country away from the fiscal cliff.
“I think the stakes of fiscal policy are very high right now,” Congressional Budget Office Director Douglas Elmendorf said recently, according to The Associated Press.
Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation
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