'Fiscal cliff could hit economy harder than many expect'

Discussion in 'Economics' started by Wallace, Oct 28, 2012.

  1. by Jason Lange WASHINGTON | Sun Oct 28, 2012 1:57pm EDT

    "(Reuters) - The United States runs the risk of a recession far deeper than many
    investors and policymakers may think if lawmakers fail to avert looming tax hikes
    and cuts to public spending.
    Absent action by Congress, the country will face the so-called fiscal cliff at the start
    of next year, a combination of lower spending and higher taxes that is expected to
    extract about $600 billion from the economy.
    Many economists think every dollar of deficit reduction will subtract nearly the same
    amount from economic growth.
    By that measure, the current course could cause the economy to contract by 0.5 %
    in 2013, according to estimates by the Congressional Budget Office (CBO) that
    have been largely embraced by Wall Street and the U.S. Federal Reserve.
    But research by economists in academia and at the International Monetary Fund
    suggests a dollar of deficit reduction could drain as much as $1.70 from the
    economy, making the prospective belt tightening much more dangerous." - more
  2. Peter Schiff
  3. well I sure as hell hope so, because I am short the dollar way more than I should be

    175k jobs and they really took it out of my hide

    the funny thing is, I'm 100% long stocks, and I think the economy is a lot better than everybody says it is

    but I'm short that dollar, and still getting short, because I think that's whose going to pay for it