Barack Obama has less than two months to broker a deal with the Republicans to prevent crippling budget cuts
Politics in the US is about to go from knife-edge to cliff-edge. The closely fought battle for the White House is over but the battle to prevent the US economy nosediving back into recession is about to begin.
Barack Obama has less than two months to broker a deal with the Republicans on Capitol Hill to prevent budget cuts worth $607bn (£380bn) of national output kicking in on 1 January.
The fiscal cliff was barely mentioned during the presidential race, but the world is now going to hear about little else.
Why? Because jumping off the fiscal cliff is seen by Wall Street, the City and the International Monetary Fund as the biggest threat to the global economy over the next year, dwarfing even the risk that a Greek exit from the eurozone would start the unravelling of monetary union.
America, despite the rapid growth of China in the past two decades, remains the world's biggest economy, accounting for just under 20% of global output.
The Congressional Budget Office (CBO) in Washington has estimated that the planned tax increases and spending cuts would reduce US gross domestic product by 4% in 2013, dwarfing the scale of George Osborne's austerity programme, which has involved budget tightening of 0.5-1% of GDP per year. To emulate in Britain what could be in store for the US, the chancellor would have to halve the NHS budget or put 10 pence on the basic rate of income tax.
4 comments:
It was mentioned during the debates. The President said emphatically that sequestration was not going to happen.
We've got an arrogant congress on one side and an arrogant president on the other. We'll see.
I say give the Dems everything they want and just sit back and watch the whole Damn country implode. Maybe then the left will learn that you cannot spend money you don,t have. It really has alredy started over Obamacare with several businesses beginning layoffs due to the cost of Obamacare.
I'm sure he could care less if the country goes over the cliff. That would be a reason for his wife to another party with Jay-Z.
He wants the country to go under so he can reform it into a liberal utopia.
Post a Comment