CBO | An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022

The CBO reports gloom and doom for 2013 is the Bush tax cuts expire:

Here’s what the CBO thinks will happen if Congress allows Bush-era tax cuts to expire and automatic spending cuts go into effect:

  • Fiscal tightening would lead to economic conditions that, “will probably be considered a recession.”
  • A very sharp hit could be in store first half of the year, with the economy contracting 2.9%. That would mark the worst contraction since early 2009.
  • The economy likely will contract 0.5% in calendar year 2013; the agency’s previous assumption was for 0.5% growth.
  • Unemployment would likely rise to about 9%, up from 8% now, and stay above 8% through 2014.
  • Effects could be felt for many years; the economy could continue to operate below its potential level until 2018.

CBO | An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s