Fiscal Cliff Could Drive Economy Into A Recession, Experts Warn
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When it comes to the U.S. economy and growth, expect more of the same. That was the message today from U.S. Chamber Chief Economist Marty Regalia speaking at the Quarterly Economic Roundtable Series hosted by the National Chamber Foundation, the Chamber’s public policy think tank.
Whether you call it lackluster, lukewarm, anemic or even moribund (as Regalia did), the panel of experts agree—the economy is growing slowly and will continue to do so for the foreseeable future.
Regalia predicts economic growth in the foreseeable future to range from 1% to 2% - a modest rate of rate of growth that is simply “not fast enough” to bring down an unemployment rate that is still hovering around 8%. “The economy is not doing well. It’s chugging along at a subpar rate.”
Regalia, along with Kate Warne, Ph.D., CFA, Investment Strategist, Edward Jones and Douglas Holtz-Eakin, Ph.D., President, American Action Forum, agreed that while the United States is not in a recession, it could be pushed over the edge by either “going over the fiscal cliff or Europe blowing up,” Regalia warned. “I’m not forecasting a recession although with average growth rates of 1% to 2%, it doesn’t take much to push you into a recession.”
Holtz-Eakin went into further detail on the fiscal cliff, which he called the “automatic austerity” facing the country at the end of the year as tax rates for middle and upper income individuals go up and federal spending cuts go into effect unless Congress acts before 2013.
Below, the former director of the Congressional Budget Office explains the fiscal cliff and how Congress and the administration could avoid it.