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CBO Best Case 2013: 8 % Unemployment, 1.7 % Growth

by Keith Koffler on August 22, 2012, 1:32 pm

The nonpartisan Congressional Budget Office today released a frightening report predicting that the economy and unemployment will be at their current disastrous levels next year, even if Congress and President Obama act to avoid the “fiscal cliff” and revoke billions in tax increases and spending cuts slated to occur at the end of the year.

What’s more, the economy will remain in the dump even as the government piles on another $1 trillion in debt. Growth would be only 1.7 percent, and unemployment would remain at about the current level, standing at 8 percent.

DOES ANYONE UNDERSTAND HOW BAD THIS IS?

The government is basically pumping out a $1 trillion annual stimulus, interest rates are at about zero, AND GDP IS STILL SWIRLING AROUND IN THE TOILET.

If Congress and Obama fail to avoid the fiscal cliff, according to CBO, the deficit will only total about $600 billion, but the economy will plummet into a recession, declining by about .5 percent, and joblessness will trudge upwards to 9 percent.

In case you’re wondering, this is what the fiscal cliff looks like:

  • A host of significant provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Public Law 111-312) are set to expire, including provisions that extended reductions in tax rates and expansions of tax credits and deductions originally enacted in 2001, 2003, or 2009. (Provisions designed to limit the reach of the alternative minimum tax, or AMT, expired on December 31, 2011.)
  • Sharp reductions in Medicare’s payment rates for physicians’ services are scheduled to take effect.
  • Automatic enforcement procedures established by the Budget Control Act of 2011 (P.L. 112-25) to restrain discretionary and mandatory spending are set to go into effect.
  • Extensions of emergency unemployment benefits and a reduction of 2 percentage points in the payroll tax for Social Security are scheduled to expire.

The White House is ringing the alarm about the prospect of edging off the cliff. What it fails to note is that things will also be miserable, although a little less so, if we don’t.

I say let’s put some more money into solar energy panels. That should turn it around.

{ 21 comments }

ol gator August 22, 2012 at 2:15 pm

How utterly useless barry obumbo is,was & will be in righting this “titanic” America he’s created…

Still clinging to his Guns of hate & Religion of socialism !

Rod August 22, 2012 at 2:27 pm

Liberals like to live in Neverland, where you never have to grow up. Facts, debt crisis, fiscal cliff, stagnant growth, crushing unemployment – these are all things you get to opt out of when you are in Neverland. Half the country figures a vote for Barack “Peter Pan” Ubama is their path to avoid responsibility and blame it on Bush or the Republicans – of course no one is talking about these things – such things don’t exist in Neverland.

gracepmc August 22, 2012 at 2:31 pm

So far today, in the most casual of glances — President diversity Obama and some white guys did some YMCA stance for Ohio , spelling it as OIHO, some have called this the 51st State — MSM tv will not cover Day 1 of the Republican convention but all 3 of the Dems. — oh yeah, Obama lackey Holder is suing Gallup — and the Presidential seal “decorates” the podium at an Obama campaign event. This “squealing pig” has yet to read anything of Biden other than he will be at the convention. No word yet whether he knows it is the Republican convention in Tampa. And oh yeah, Jake Tapper made a clarion call for unbiased reporting. Maybe those people in the 52nd state understand how bad the CBO report is, but nobody in Obama’s current 51 states even cares. Disgusting.

Star August 22, 2012 at 3:32 pm

People tend to get a case of MEGO (My Eyes Glaze Over) from threads like this–but we must force ourselves to think, concentrate, not just skate brainwise over to the real housewives, prgenant New Jersey gals, or some dance contest. Let’s at least elect the people who dare to risk their careers saying they can fix some of this.

Aileen August 22, 2012 at 6:17 pm

You’re back! :-)

Langley Spook August 22, 2012 at 3:36 pm

“US economic collapse”…?
Time to stock up on canned food, weapons & ammo, fuel, a V-8 Interceptor and leather Mad Max outfits :-)

Danceswithtruth August 22, 2012 at 9:17 pm

Oh thank goodness, I’m covered!

Sadie August 22, 2012 at 3:41 pm

“The White House is ringing the alarm …”

They bought an alarm clock with stimulus money and it’s been set at snooze the past four years.

Girly1 August 22, 2012 at 3:56 pm

The soon-to-be Six Trillion $$$ Man is running the Executive office as a hedge fund with taxpayer dollars – betting that his special interest ‘giveaways’ will pay off and give him four more years. He deserves the same fate as Madoff and others.

Speaking of crooked politics, it appears that Uncle Joey will be on special assignment in Tampa – Monday AND Tuesday. Much speculation was given on The Lunch two days ago. My guess is Obama wanted to give him last minute instructions and talking points on how to completely disrupt the RNC convention. This will be the first time in history that a member of the opposition crashes the Convention venue of their opponent. Leave it to Obama to be the first – and the dirtiest!

Susan August 22, 2012 at 4:54 pm

Heard about ol’ Joe crashing the Republican convention. When I first read the Drudge Report, I thought it said he would be handing out pamphlets to the OWS critters who are planning to disrupt Tampa. He’s not, but wouldn’t doubt he’s going there to try and whip up some dissent.

Susan August 22, 2012 at 5:11 pm

We may fall off the fiscal cliff even if Romney/Ryan win the election. That is why we must have someone in office who believes in our Constitution and the rule of law at the time the crash occurs. Just be prepared for any emergency my friends.

“Sharp reductions in Medicare’s payment rates for physicians’ services are scheduled to take effect.”
The doctor cuts are already happening. It’s part of the $716 Billion Obamacare steals from Medicare. They are spending the money as fast as they can because they know when the Republicans take over, Obamacare is history.

RickW August 22, 2012 at 6:00 pm

Sorry to be negative but I think the CBO estimates are far too optimistic. Granted, they are trying to call attention to the issue but I look for double digit unemployment (Its really that now but we count selectively) and negative economic growth. Both parties in Congress are full of idiots who’s only focus is on being re-elected. The best thing the current fool in the WH could do is to go off and write a book during his lame duck period, keeping him away from the real work. Frankly, I’d like to see the Congress pass some emergency act that could bring R & R in faster than mid January. They will need all the time they can find to right this ship.

Danceswithtruth August 22, 2012 at 9:21 pm

I agree! Energy rates increasing, food prices increasing. the stock market propped up along the lines of printing money. What a fallacy.

Girly1 August 22, 2012 at 7:16 pm

Today on Brett Baier: Dr. K does not think we are going over the fiscal cliff -regardless of who is President. He sleeps well – and doesn’t take Ambien. Doesn’t sound like Dr. K is concerned about who is President as far as fixing the economy is concerned. Hmmm.

Video:
http://www.nationalreview.com/corner/314734/krauthammer-fiscal-cliff-noah-glyn

Sadie August 22, 2012 at 8:34 pm

Hmmm. Really? Obama doesn’t want another recession – how about the current one or the inflationary one we’ve been coping with. Well…Dr. K can write his own script for Ambien, if needed and I’ll take guess here and say, he hasn’t been the supermarket or filled the tank lately.

Danceswithtruth August 22, 2012 at 9:22 pm

With the Fed printing money, the inflation has raised the cost of just about everything. From 2009 to present check out these increases:
Heating Oil +155%
Gasoline +195%
Natural Gas -45%
Wheat +100%
Soybeans +72%
Corn +114%
Cotton +7%
Cattle +43%
Sugar +60%
Coffee +31%
Orange Juice +56%
When you spend $50 at the grocery store to get a few items, then drive down the street and fill up your gas tank for another $50, that’s what I call a hidden inflation tax.

Sadie August 22, 2012 at 10:11 pm

Don’t forget to add the pit stop at the pharmacy.

Michael August 22, 2012 at 9:05 pm

Careful, Keith, with your last sentence. The geniuses in the WH may actually take you seriously!

Robin H August 22, 2012 at 9:59 pm

Keith, I personally understand how bad this is. My husband just lost his job and we will probably have to relocate for him to get another one, what with NJ unemployment at an all-time high. Right now he’s in Indiana at an interview. I’m thankful he has the interview, and I’m thankful he’s willing to move, but with 2 kids in high school it’s really hard on them. So yes, some of us are paying attention.

ImNoDhimmi August 24, 2012 at 7:27 pm

Barry’s the “bitter clinger” now.

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