We’ve been hearing a lot about the “fiscal cliff” – the calamity that will result if Congress fails by the beginning of January to thwart scheduled tax increases and across-the-board spending cuts (“sequestration”). Most economists expect that that would send the U.S. spinning into another recession.
But even without those disastrous developments, economic prospects for the nation remain dismal for the foreseeable future. The Philadelphia Federal Reserve Bank’s survey of 39 economic forecasters released Nov. 9 predicts that real gross domestic product will grow this quarter at an annual rate of .8 percent, down from the previous estimate of 2.2 percent. The central bankers also predicted unemployment would average 7.8 percent in 2013, Last month, it was 7.9 percent.
In other words, economic growth and employment are expected to remain comparatively weak at least well into President Obama’s second term.
Whether we go over the fiscal cliff, with President Obama’s reelection we also are facing a “regulatory cliff” that will inflict damage on the economy and America’s middle class.