CBO: Fiscal Cliff Will Bring 9.1% Unemployment
We need less cliff, more 'gradual slope,' suggests forecast
By John Johnson, Newser Staff
Posted Nov 8, 2012 7:06 PM CST
In this Oct. 25 photo, a sign attracts job-seekers during a job fair at the Marriott Hotel in Colonie, N.Y.   (AP Photo/Mike Groll)

(Newser) – It's not so much a surprising conclusion as a reminder of what's at stake: The Congressional Budget Office warned today that a failure to head off the fiscal cliff at year's end will probably lead to a new recession next year along with a jump in the unemployment rate to 9.1%, reports Politico. The nonpartisan panel said the abrupt combination of tax hikes and spending cuts also would slow economic growth by .5% over the year, reports the Wall Street Journal. The report comes as House Republicans and the White House were suggesting they were ready to talk about a deal.

And now comes the tricky part, as the Christian Science Monitor explains: While the CBO warned that doing nothing and plunging over the cliff is bad in the short term, it said those tax increases and spending cuts would help in the long run by reducing the deficit and the national debt. "The ideal way forward, suggested in the CBO report and in other independent reviews, would be to change the cliff into a gradual slope," writes the Monitor's Mark Trumbull, "one that avoids recession in the near-term but still leads down a path of deficit reduction."

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Showing 3 of 87 comments
Tology
Nov 10, 2012 2:26 AM CST
Everywhere I look there are signs that say 'Help Wanted', the problem is that we don't have qualified people to fill the jobs. These are technical high paying jobs working for solid companies that sell their products internationally, yet the signs have been up for months. Too many kids are getting degrees in college and not enough are getting training in technical schools. There is a demand for workers that can produce things but we have raised a generation of kids that have no idea how to use a tool.
antigen-xy
Nov 9, 2012 9:28 AM CST
This "fiscal cliff" isn't so much a cliff but a slope downward. Even if the congress waits until after the first of the year to come up with a solution, they can still make the changes effective January 1st. We do have a little time to resolve this intelligently before the tide rolls in.
reallybig
Nov 9, 2012 8:55 AM CST
SERIOUSLY -- Another way to solve the Fiscal cliff and the National Debt, is legalize drugs, and then tax it like cigarettes. --- Seriously fighting the drug war, and trying to rehabilitate druggies is costing the government at least a trillion dollars. --- The US can save the trillion dollars, and make at least a trillion dollars in taxes, from taxing legal drugs. --- The Netherlands do it, and they are far better off by doing it. --- IF someone wants to save the druggies, do it with their money. ------- REALLY