Pages
1 watching you tiny alien kittens are  Mon, Nov 26, 2012 10:10:55am

If Congress does nothing and allows all of the "fiscal tightening" measures to go into effect here is what the CBO says will result...

According to CBO’s projections, if all of that fiscal tightening occurs, real (inflation-adjusted) gross domestic product (GDP) will drop by 0.5 percent in 2013 (as measured by the change from the fourth quarter of 2012 to the fourth quarter of 2013)—reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year. That contraction of the economy will cause employment to decline and the unemployment rate to rise to 9.1 percent in the fourth quarter of 2013.
[Link: www.cbo.gov...]

So yes, recession and higher unemployment. I'm still looking at the full PDF version trying to figure out how they conclude that the GDP would begin to rebound towards positive growth again within the year. That seems overly optimistic to me considering how slow growth already is. Still they conclude that under this scenario it would take until 2018 for unemployment to drop back to 5.5%.

However if Obama were to get what he originally said he wanted...

Extending all expiring tax provisions other than the cut in the payroll tax and indexing the AMT for inflation—except for allowing the expiration of lower tax rates on income above $250,000 for couples and $200,000 for single taxpayers—would boost real GDP by about 1¼ percent by the end of 2013. That effect is nearly as large as the effect of making all of those changes in law and extending the lower tax rates on higher incomes as well (which CBO estimates to be a little less than 1½ percent, as noted above), primarily because the budgetary impact would be nearly as large (and secondarily because the extension of lower tax rates on higher incomes would have a relatively small effect on output per dollar of budgetary cost).

Note that if you read that CBO report carefully it is actually suggesting two scenarios that achieve the highest growth of the GDP. The first is a two year extension of the Bush tax cuts, except for the top bracket, and a like delay of any fiscal tightening measures resulting in 2.7% growth. The second is the same but also extends the payroll tax cut and emergency unemployment benefits resulting in 3.4% growth.

Also note that they state that allowing taxes to rise on the top bracket would only knock less than .025 off of the maximum possible GDP growth. So much for the "Hurting the Job Creators" mantra, the numbers simply don't back that claim up.

However as far as the budget is concerned allowing the top bracket cut to expire does almost as much good by itself as all the other proposed fiscal measures do when combined. How is that possible? It is because the Government gets that money without any corresponding increased costs to itself. No large surge of unemployment benefits, no reduced tax base due to recession, no increase in welfare and medical benefits to the poor, that's how.


This page has been archived.
Comments are closed.

^ back to top ^

TwitterFacebook

Turn off all ads for a full year by subscribing!
For about 33 cents a day (per month) or 22 cents a day (per year), our subscription option turns off all advertisements at LGF!
Read more...

► LGF Headlines

  • Loading...

► Tweeted Articles

  • Loading...

► Tweeted Pages

  • Loading...

► Top 10 Comments

  • Loading...

► Bottom Comments

  • Loading...

► Recent Comments

  • Loading...

► Tools/Info

► Tag Cloud

► Contact

You must have Javascript enabled to use the contact form.
Your email:

Subject:

Message:


Messages may be published unless you request otherwise.
Tech Note:
Using the Contact Form
LGF Pages

This button leads to the main index of LGF Pages, our user-submitted articles. You can post your own LGF Pages simply by registering a free account with us.

Create a Page

This is the LGF Pages posting bookmarklet. To use it, drag this button to your browser's bookmark bar, and title it 'LGF Pages' (or whatever you like). Then browse to a site you want to post, select some text on the page to use for a quote, click the bookmarklet, and the Pages posting window will appear with the title, text, and any embedded video or audio files already filled in, ready to go.

Last updated: 2014-03-07 2:19 pm PST

LGF User's Guide
Recent Pages
FemNaziBitch
Bloomberg Plans a $50 Million Challenge to the N.R.A.
Michael R. Bloomberg, making his first major political investment since leaving office, plans to spend $50 million this year building a nationwide grass-roots network to motivate voters who feel strongly about curbing gun violence, an organization he hopes can eventually outmuscle the National Rifle Association. Mr. Bloomberg, the former mayor of New York, said gun control advocates need to learn from the N.R.A. ...

2 hours, 12 minutes ago
Views: 52 • Comments: 0
Tweets: 0 • Rating: 0
Randall Gross
FCC’s Rules for Spectrum Auction May Level Playing Field for Small Carriers
On Monday evening, Re/code wrote about the complicated set of rules that the FCC's wireless bureau is hoping will be adopted for the TV spectrum auction that will take place in 2015. According to these restrictions, carriers with lots of spectrum like AT&T, Verizon, and Sprint could be prohibited from bidding on up to one-third of the auctioned-off spectrum in a given area, ...

2 hours, 18 minutes ago
Views: 36 • Comments: 0
Tweets: 0 • Rating: 0
Political Atheist
The Insane History of Rockets at Jet Propulsion Laboratories
The Rocket Boys In the late 1930s, a group of Caltech graduate students were booted off campus after blowing up (part of!) their building during a rocket test gone awry. Unwilling to give up on the joy of semi-controlled explosions, the students and a few of their friends headed into the San Gabriel Mountains. They picked a deserted gully -- Arroyo Seco -- ...

9 hours, 37 minutes ago
Views: 77 • Comments: 0
Tweets: 0 • Rating: 1
iossarian
Drug Companies Want Your Money
Two thematically-related stories on the BBC at the moment: UK drug company Glaxo 'paid bribes to Polish doctors' UK drug company GlaxoSmithKline is facing a criminal investigation in Poland for allegedly bribing doctors, BBC Panorama has discovered. Tamiflu: Millions wasted on flu drug, claims major report Hundreds of millions of pounds may have been wasted on a drug for flu that works no better ...

15 hours, 52 minutes ago
Views: 138 • Comments: 0
Tweets: 8 • Rating: 0
palmerskiss
Women on Front of Bundy Standoff - the Latest From the Front
But the scene above took place four years before Monica, in 1994, long before Clinton handed his enemies a scandal on a platter that seemingly made such references acceptable. It was not at a Republican caucus or Christian Coalition meeting, but at a gathering of right-wing "Patriots" who had come to hear about forming militias and common-law courts and defending their gun rights ...

18 hours, 16 minutes ago
Views: 144 • Comments: 5
Tweets: 0 • Rating: 3
cycroft
Russ Campbell’s Blog: Military Threat Is Essential to Effective Diplomacy
Pres­i­dent Theodore Roo­sevelt fa­mously said: "speak softly, and carry a big stick." His idea was to ne­go­ti­ate peace­fully, but with the ever-pre­sent threat of the "big stick," mil­i­tary ac­tion. Per­haps in this proverb lies is a valu­able les­son for lead­ers of the West­ern democ­ra­cies, and es­pe­cially for Pres­i­dent Obama. On the week­end, well co­or­di­nated and armed mil­i­tants at­tacked gov­ern­ment build­ings in six cities ...

19 hours, 40 minutes ago
Views: 67 • Comments: 0
Tweets: 0 • Rating: 0
steve_davis
Skyline Pigeon
Your text to link...

2 days, 20 hours ago
Views: 209 • Comments: 2
Tweets: 0 • Rating: 4
Dark_Falcon
Presenting the Tracking Point AR series of rifles
Tracking Point has finally gotten their system to work with the AR-10 and AR-15 platforms. Now available in 5.56x45mm, 7.62x51mm and 300 AAC Blackout (a longer ranged 5.56 derivative). Hopefully, the Army and Marines can find the money for some of these, for these rifles will give our designated marksmen a real advantage in combat. They are also available for civilian sale, though at ...

4 days, 11 hours ago
Views: 347 • Comments: 4
Tweets: 0 • Rating: 2
MichaelJ
2014 Drug Aware Margaret River Pro - ASP
More: 2014 Drug Aware Margaret River Pro - ASP Round 5 is going to be all about getting barreled. This is going to be good.

6 days, 11 hours ago
Views: 248 • Comments: 0
Tweets: 1 • Rating: 0
Skip Intro
North Carolina Appeals Coal Ash Ruling
There's a lot of very weird stuff going on in the newly insane state of North Carolina. The state has a problem with coal ash, and with its groundwater, and with the reluctance of Duke Energy to clean up, among other things, the 39,000 fking pounds of the gunk that it spilled into the Dan River in February. The state's Environmental Management Commission ...

1 week ago
Views: 551 • Comments: 6
Tweets: 0 • Rating: 8
 Frank says:

If something goes wrong and you tend to smile it away, then you have someone to blame.