Mamta Badkar | May 17, 2012, 10:54 AM
Unless Congress acts, more than $600 billion in tax and spending provisions will change at the end of the year. And this will impose fiscal restraint at a time when the U.S. economy is growing very gradually.
But what is the fiscal cliff? What impact could it have on the economy? What are the most likely scenarios? And which companies most exposed to government spending stand to take a hit?
- Ben Bernanke says Euro crisis, ‘fiscal cliff’ threaten U.S. economy (calgaryherald.com)
- What the Fed fears (economist.com)
- Here’s A Calendar For Fiscal Cliff-Mageddon (businessinsider.com)
Think everything’s fine in the US economy?
Austan Goolsbee — Obama’s former top econ advisor — is not so sure.
In a comment to Ben White’s Morning Money at POLITICO, Goolsbee explains how easily it could all slip away.
‘Unlike in other V-shaped recoveries from recessions, we cannot go back to what we were doing before … We have to shift away from housing and consumption to exporting and investing and that’s a very slow process … And the world has not been tremendously friendly to enabling us to do that. Europeans have fumbled and fumbled their way to negative growth … And China is slowing while the price of gas is going up. There are definitely some clouds. I’m not pessimistic. I’m just guardedly optimistic. … Productivity grows 2 percent a year. So if the growth rate slows to around 2 percent then the job market will stop improving and the unemployment rate will start going back up again. …
- Love is never having to say you’re too big to fail: Our favourite #FedValentines (business.financialpost.com)
- United States still in better shape than Europe: Goolsbee (business.financialpost.com)
- Austan Goolsbee’s Budget Math Is Wrong – More than 100 Percent of Long-Term Fiscal Challenge Is Government Spending (forbes.com)
- 5 Questions for Obama (politico.com)
Good honest charts never go out of fashion (although we have “moved” along the chart for the past year).
Probably still the best “one chart says it all”.
- Fiat’s 0% finance on throughout May (autonetinsurance.co.uk)
- MEP Godfrey Bloom: Fiat Currencies are Falling Across the Globe (stevebeckow.com)