Recession Very Possible in Q1 of 2013: Investors And CEOs Are Getting Very Nervous With Cloud Of Uncertainty, The Announcements of Layoffs Are Coming Fast and Furious, And We All Start Feeling The Economy Is Decelerating!
October 27th, 2012
Uncertainty is a major cause of stock market jitters.
Report: Fiscal Cliff Might Kill 6 Million Jobs as Unemployment Nears 12%
Unless Congress acts before January, the fiscal cliff will eliminate almost 6 million jobs and send the unemployment rate to near 12 percent, the study warns. About $100 billion in spending cuts and about $400 billion in tax increases will go into effect in January unless Congress acts.
Anticipating the fall-out, companies are laying off workers, not filling jobs and delaying investments. Fear of the fiscal cliff has wiped out nearly 1 million jobs this year alone, the NAM study, called “Fiscal Shock: America’s Economic Crisis,” claims.
Austerity Problems, Fiscal Cliff Perils, U.S. Election it’s the Economy Stupid!
The Perils of the Fiscal Cliff
In the third quarter of 2011 the US Congress agreed to rather severe tax increases and spending cuts that would kick in as of January 2013, as a way to get a deal done to increase the debt ceiling. In addition, the Social Security payroll tax cut and extended unemployment benefits are also scheduled to go away in January. All told, if nothing changes, this abrupt shift in fiscal policy would result in a hit to the economy of about $650 billion, or a little more than 4% of GDP, at a time when the economy is likely growing less than 2% a year.