Fiscal cliff to improve debt outlook but cause recession
August 22nd, 2012
11:19 AM ET
2 years ago

Fiscal cliff to improve debt outlook but cause recession

NEW YORK (CNNMoney) - If the so-called fiscal cliff takes effect in 2013, the U.S. deficit outlook will improve, but scheduled tax increases and spending cuts would push the country into recession and unemployment up to 9%.

That's one of the main takeaways from an analysis Wednesday by the Congressional Budget Office, which released its updated budget and economic projections for 2012 through 2022.

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soundoff (48 Responses)
  1. Four and The Door

    Bottom line? Management of our federal government is not working at all. Obvious first step? Romney/ Ryan 2012.

    August 22, 2012 11:24 am at 11:24 am |
  2. Rob

    I Doubt They Will Fix This Problem. They Will Just Make It Worse

    August 22, 2012 11:28 am at 11:28 am |
  3. WILLARD MILTON ROMNEY IS A COWARD & TAX EVADER

    All the more reason why Congress needs to be in session NOW!!! Congress needs to get their act together or sequestration it is. This is very irresponsible of Congress and Congress alone.

    August 22, 2012 11:29 am at 11:29 am |
  4. American People

    The GOP solution to Fiscal Cliffs: Tax cuts for the rich to create jobs in India and China!!!! er......I mean to create Fiscal Cliffs!!! Yeah......that's it!!!!!!!!!!

    August 22, 2012 11:31 am at 11:31 am |
  5. Say No to Willard Romney Hood and Personhood Ann Ryand

    Bottom line? Management of our federal government is not working at all. Obvious first step? Romney/ Ryan 2012.

    Bottom line: John Boehner got 98% of what he wanted, therefore he gets 98% of the blame that goes with this and the automatic defense cuts. Unlike you, most Americans don't have the attention span of a gnat; we refuse to go back to the Bush economic policy that caused the mess. Romney/Lyin Ryan = Bush/Cheney 3.0 = no thanks.
    There. FIFY...

    August 22, 2012 11:32 am at 11:32 am |
  6. Really?

    @ Four and the door – Just like voting for Bush (twice) was an obvious first step? How much do you get paid from the RNC to post here?

    August 22, 2012 11:34 am at 11:34 am |
  7. NameRegfolks

    If we could calculate how much the GOP, FOX and Norquest has spent over the past 3 years to derrail this one administration,you would see why we still talk about recession.

    August 22, 2012 11:41 am at 11:41 am |
  8. Four and The Door

    Say No to Willard Romney Hood and Personhood Ann Ryand

    ...we refuse to go back to the Bush economic policy that caused the mess. Romney/Lyin Ryan = Bush/Cheney 3.0 = no thanks.
    ________________________________________________________________________________________
    I hate to disappoint you, but Obama doesn't get to run against GWB in 2012. In fact, Obama did not defeat him in 2008. He was not running then, either. He was defeated by Term Limits, something Obama will never need to worry about.

    But Obama does have to run against Mitt Romney, a guy with a strong record of success in both the private and government sectors and a much different plan for getting the nation on a path to recovery. Mitt Romney's plan is projected to help add 12 million jobs by the end of his first term. That beats the negative job record of Obama's first term. And we need a better approach. The middle class is tired of broken promises and ineffective programs from the federal government. We don't need to go backwards to the failed strategies of 2009 and 2010.

    August 22, 2012 11:44 am at 11:44 am |
  9. gord

    bush killed the middle class–and some people want part two-the scammers that made money under bush

    August 22, 2012 11:44 am at 11:44 am |
  10. Anonymous

    "Bottom line? Management of our federal government is not working at all. Obvious first step? Romney/ Ryan 2012."

    I dunno, Four. Have you bothered to research Ryan's "yeah" votes for the past 14 years? Seems he was all for Mr. Cheney's "deficits don't matter" ideology. Then again, he was for a great many things...before he was against them.

    Romney/Ryan Flip/Flop

    August 22, 2012 11:46 am at 11:46 am |
  11. Shizuoka

    The race is simply those that want Freedom to acheive the American Dream against those the want to Freeload.

    August 22, 2012 11:48 am at 11:48 am |
  12. Wire Palladin, S. F.

    8.3% – If I had no knowledge of the 8 years of Bush ineptness, and watched only Fox foreign media, I would think you make valid points. However, we all know better.

    August 22, 2012 11:50 am at 11:50 am |
  13. Wire Palladin, S. F.

    Ryan voted for every Bush program that added $4.8 trillion to our national debt, bringing to total to $12 trillion republican national debt.

    August 22, 2012 11:51 am at 11:51 am |
  14. Wire Palladin, S. F.

    People who make $21 million and pay a tax rate less than 14% are freeloaders. Republicans who have no health care and show up at emergency rooms are free loaders. People who start or support unnecessary wars and refuse to serve in the military are freeloaders. More later.

    August 22, 2012 11:53 am at 11:53 am |
  15. Logic N LA

    Let's remeber why we have this "fiscal cliff" in the first place- Congress's failure to act.
    And don't even try and blame the Democrats and Obama. They had control for24 months – they first year of that was spent trying to stabilize the economy while fighting the Republicans every step of the way. 2010 they House went back to the GOP but all thye wanted was lower taxes ( a proven failure) and social laws.
    You want change- put accountants in the house and not lawyers.

    August 22, 2012 11:54 am at 11:54 am |
  16. Nametimothy

    Romney will definitely lower unemployment. Unfortunately, those jobs won't pay a living wage. He isn't a good choice.

    August 22, 2012 11:55 am at 11:55 am |
  17. kevin

    There is no simple answer but one big problem-the federal government. The more it is involved the worst it gets. Let us look at the second half of the 37th Congress during the Civil War. They created the Legal Tender Act which estblished our present money system. The Homestead Act gave people 150 arces of public land. After 5 years of improvements the person got the land for free. Government didn't tell how to do it or what improvements to make. It was a hand up and not a hand out. Same for the railroads that built the continetal railroad. Each member of Congress was given 30,000 arce of public land to build universties. These changed America forever and through all no government interference. It can be done.

    August 22, 2012 11:56 am at 11:56 am |
  18. S.B. Stein E.B. NJ

    The problems are as follows: to many tax cuts for those that don't need them; the military activities weren't paid for; additional parts to Medicare that weren't paid for; Congress wanting to cut spending on needed infrastructure (which would create jobs); and problems with regulators not having the knowledge, power and ability to keep the corporations out there from screwing the average person.

    August 22, 2012 11:56 am at 11:56 am |
  19. Say No to Willard Romney Hood and Personhood Ann Ryand

    @ Fair: When the Bush mess has been cleaned up, we'll talk. Just because the engineer stepped away from the train wreck that he's liable for does not relieve said engineer from the responsibility of causing the wreck since he's no longer driving. Now as an added bonus, we have Romney running on BUSH policies and using BUSH advisors. No Bush? Nice try. And if you and your party were so fond of Capt. Mission Accomplished, he'd be front and center at the convention instead of in witness protection.
    I hate to disappoint you, dear, but Americans do not have short memories that you all wish were the case.
    Try again.

    August 22, 2012 11:57 am at 11:57 am |
  20. Me IN HOUSTON

    This is our fault.
    If we had the same voter turn out that we had when we elected President Obama WE WOULDN'T BE HEADED TOWARDS A FISCAL CLIFF!
    ELECTIONS HAVE CONSEQUENCES AND WE ARE SUFFERING OURS RIGHT NOW!

    August 22, 2012 12:01 pm at 12:01 pm |
  21. 8.3% unemployment - Over 8% 42 Straight months and the Obama Jobs DEPRESSION continues unabated

    Like I told all of you a while back.... there was only ONE more bubble left to burst. The BIG GOVERNMENT DEBT BUBBLE. Many socialist European countries are going through it now. The USA is starting to see the onset of the debt bubble nightmare. It will only get worse. The USA is addicted to borrowing and deficit spending. Getting the USA off the debt addiction will be as painful as getting off crack cold turkey. All the government dependents will feel the pain more than others. It is the pain of reality and the real world the rest of us have been living in for years. The gravy train is heading over the cliff. Fastening your safety belts won't help much.

    August 22, 2012 12:01 pm at 12:01 pm |
  22. Wire Palladin, S. F.

    Say no to Willard – Amen to your post! It took 8 years to get out of the first republican near depression, and it may take another 8 years to get out of this Bush republican near depression.

    August 22, 2012 12:05 pm at 12:05 pm |
  23. Say No to Willard Romney Hood and Personhood Ann Ryand

    @ Fair,
    Sorry to pick on you, but you left some hanging curveballs that I can't help but take yard.
    Romney has a strong record in the public sector? Like 47th in job growth? Like outsourcing MA residents jobs to India? Like Romneycare? I'll give you that one if you want, but if you are going to live up to your name, then acknowledging a flip-flop and all the good things that go with mandates would be fair is fair.
    The other thing: his "plan"???? I have a plan too. I plan to get up tomorrow, I plan to breathe air, I plan to eat.....something. I plan to go to sleep at the end of the day. See, we all have plans as specific as RMoney's. And 12 million? He should have said 22 million. That one goes with Bachmann's gas price promise. Cmon you're better than that, at least I hope you are.
    This one takes the cake: We don't need to go backwards to the failed strategies of 2009 and 2010.
    Yeah, 29 months of private sector job growth, versus losing 750,000 jobs a month. You are entitled to your own opinions, you don't get to have your own set of facts.

    August 22, 2012 12:05 pm at 12:05 pm |
  24. Sniffit

    "Bottom line? Management of our federal government is not working at all. Obvious first step? Romney/ Ryan 2012."

    Obvious how? They haven't given us any details whatsoever to base any decisions on and certainly insufficient amounts of details, specifics, data, numbers or analysis to make anything even remotely "obvious." Had they done so, you wouldn't be parroting substanceless talking-point cheerleader word salad all day on this site. Moreover, everyone is well aware that it's not the CEO (POTUS), but the Board of Directors (Congress), that is causing the federal gov't to screech to a standstill and do nothing about the economy and jobs...with the GOP/Teatrolls at the helm of the sinking USS Partisan Obstruction. Furthermore, the only vague details we do have resulted in experts stating that Mittens' budget and tax "plans," sch as they are, would REQUIRE raising taxes on the middle-class to pay for lowering taxes exorbitantly for the rich...and Ryan's Pathology of Plutocracy budget plan would explode the budgetary problems by $4.5T in a few short years. Meanwhile, Mittens is running around promising to undo $700B+ in SAVINGS, NOT CUTS, to Medicare, which would only exacerbate the problem of increasing middle-class taxes under his buget and tax "plans." Would you like to explain to the class what $2,000+ in extra annual taxes for the average middle-class family does to demand?

    August 22, 2012 12:06 pm at 12:06 pm |
  25. 8.3% unemployment - Over 8% 42 Straight months and the Obama Jobs DEPRESSION continues unabated

    Wire Palladin, S. F. – Ryan voted for every Bush program that added $4.8 trillion to our national debt
    =======================================================================
    Obama has added MORe than this in FOUR years. If the American people lose their collective minds and give him another 4 years, he will have added OVER TEN TRILLION to the debt. Quite an accomplishment don't you think?

    August 22, 2012 12:06 pm at 12:06 pm |
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