U.S. faces likely recession if year end budget cuts and tax hikes go ahead
Linkedin

U.S. faces likely recession if year end budget cuts and tax hikes go ahead

Washington : DC : USA | May 23, 2012 at 8:33 PM PDT
XX XX
Views: Pending
 
Bernanke: US Headed for Massive Fiscal Cliff





The Congressional Budget Office warns that if the spending cuts and tax hikes go ahead as scheduled next January there will likely be a recession in the U.S. However they predicted that by the second half of the year there would be a rebound to an annual 2.3 growth rate. For the full year growth would be just .5 per cent.

While there is plenty of worry about the debt situation in Greece, the socalled fiscal cliff facing the U.S. at the end of this year seems to be conveniently ignored. The political deal arranged last year would see an immediate cut of 1.2 billion from government spending while billions in tax cuts also expire. Consumer demand for many items would obviously contract.

Most analysts expect a new deal will be reached by the two parties yet it seems that both parties are concentrating on the coming elections rather than facing up to the issue. If the scheduled policies are removed or offset the CBO estimates the U.S. economy could grow at 4.4 per cent a respectable growth rate given the U.S. situation.

Ben Bernanke warned back in April::“The size of the fiscal cliff is such that there is, I think, absolutely no chance that the Federal Reserve could or would have the ability whatsoever to offset that effect on the economy,” The politicians should get moving on this issue or they will find they are faced with a crisis in November. For more see this article.

1 of 2
Next
RBI hiked its growth forecast for the fiscal year to March to 7.5 percent from a previous target of 6.0 percent
RBI hiked its growth forecast for the fiscal year to March to 7.5 percent from a previous target of 6.0 percent
northsunm32 is based in Brandon, Manitoba, Canada, and is an Anchor on Allvoices.
Report Credibility
 
  • Clear
  • Share:
  • Share
  • Clear
  • Clear
  • Clear
  • Clear
 
 
 
Advertisement
 

News Stories

 

Blogs

 >

Images

 >
 

More From Allvoices

Related People

Report Your News Got a similar story?
Add it to the network!

Or add related content to this report

Most Commented Reports



Use of this site is governed by our Terms of Use Agreement and Privacy Policy.

© Allvoices, Inc. 2008-2014. All rights reserved. Powered by PulsePoint.