CBO Sees 2013 Recession Risk

The Wall Street Journal ^ | May 23, 2012 | DAMIAN PALETTA

[MinorityRepublican]

WASHINGTON—The U.S. economy will likely fall into recession in the first half of 2013 if large tax increases and scheduled government spending cuts are allowed to go into effect in January, the Congressional Budget Office said Tuesday.

The nonpartisan agency's finding could ramp up pressure on policy makers to reach a broad budget deal later this year to avoid such an outcome.

The combination of tax increases and spending cuts, often referred to as a "fiscal cliff," would sharply reduce the federal budget deficit but would temporarily arrest the economic recovery, said the CBO, which serves as Congress's budget calculator.

The CBO projected the economy would contract at a 1.3% annual rate in the first six months of 2013, likely meeting the definition of a "mild recession," if certain tax increases and spending cuts are allowed to take effect next year. The economy would stabilize in the second half of 2013 and grow by 0.5% over the year.

The economy has grown at an average 2.4% annual rate since the recovery began in mid-2009.

[rockvillem]

LOL - pay no attention to the Marxist-in-Chief destroying the economy in the name of “fairness” All is well!!! Let’s all be equally miserable!!

[Venturer]

Arrest what recovery??

That recovery has been arrested more than the Mexicans in Joe Aripaio’s tents.

There is no recovery, and there will not be one with Spend-it-all Obama as president.

[exDemMom]

What recovery? There are fewer people working than ever.

I didn’t know about any spending cuts. Or is that more deceptive double-talk—calling an increase of 3% a cut, because it is smaller than the originally planned 6% increase? We need real spending cuts, not smaller increases.

[unkus]

I didn’t know about any spending cuts. Or is that more deceptive double-talk—calling an increase of 3% a cut, because it is smaller than the originally planned 6% increase?

>>We need real spending cuts, not smaller increases.<<

---

Exactly!

[DoughtyOne]

I don’t care what they say, we never emerged from the recession. I know there is a formula that may say we did, even if not manipulated, but any formula that doesn’t take into consideration the massive number of unemployed, dropped out, and underpaid, is a formula so flawed that it is laughable instead of trustworthy.

Any downturn from here, brings about something more like a depression than a new recession.

Lending institutions and banks are in a brittle position. Housing is severely damaged. The middle class is under severe pressure. Obama is going after the rich now too. Yikes, what hasn’t he screwed up?

[Gabrial]

Obama has made my commute a lot better. With gas prices so high and so many people dropping out of the workforce, the highway does not back up like it used to.

True, but /s anyway.

[Texas resident]

Is this the same CBO that scored obamacare as a winner?

What’s up with this?