The U.S. economy is facing a dire fiscal dilemma this year that will aggravate an inbound recession, says international investor Jim Rogers, CEO and chairman of Rogers Holdings.
At the end of this year, tax cuts are set to expire while automatic spending cuts are set to kick in at the same time, a combination dubbed by Wall Street as a “fiscal cliff.”
Failure to stop it now could see the combination of tax hikes and spending cuts siphon billions of dollars out of the economy and offset any growth.
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Considering that the country is due for a fresh downturn anyway as part of a cyclical trend, failure to address the fiscal cliff could mean disaster for the economy, Rogers says.
The U.S. economy, Rogers says, contracts or slows up ever six years by its nature and the last downturn began at the end of 2007.
"If you are going to raise taxes in 2013 I assure you the economy is going to slow down and slow down a lot," Rogers tells Newsmax.TV in an exclusive interview.
"Cutting spending would be good, by the way. It would help the economy. Would they do that? I doubt it because too many lobbyists are going to race in and say 'you can't cut my spending,'" Rogers adds, referring to lawmakers who must approve expiration dates to tax holidays or start dates for spending cuts.
"I hope they are smart enough to keep the tax cuts in place."
See these other exclusive excerpts from the Jim Rogers interview:
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