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.

Or... you can just click this button to open the Pages posting window right away.

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

LGF User's Guide
Recent Pages
Shiplord Kirel
Police in Austin, TX Investigating After Shooter Killed (targeted Mexican consulate)
What right wing terrorism? I think since the police chief has publicly discussed an anti-immigration motive we are on fairly solid ground discussing that possibility. Note that a mounted officer fired at the loon from horseback, but investigators don't know ...

1 hour, 17 minutes ago
Views: 46 • Comments: 1
Tweets: 0 • Rating: 0
Skip Intro
‘Professor’ Who Assisted in Mike Brown Autopsy Revealed as ‘Fraud, Con Artist’
Just when you thought the investigation into Ferguson cop Darren Wilson's shooting of an unarmed black teen couldn't get any more fucked up, it gets even more fucked up. Shawn Parcells became an instant media star in August after ...

1 hour, 43 minutes ago
Views: 87 • Comments: 2
Tweets: 0 • Rating: 2
Randall Gross
Mexico’s Law-and-Order Crisis: Missing the Point
When power is divided between the hands of a hereditary privileged elite and the leaders of narco terror gangs, this is the result. Let's not follow the lead of Mexico as we progress into this still relatively new century. On ...

7 hours, 15 minutes ago
Views: 102 • Comments: 0
Tweets: 0 • Rating: 3
The Vicious Fergushka
The Scientific Explanation of Why People Kill Each Other Over TVs on Black Friday
More: The Scientific Explanation of Why People Kill Each Other Over TVs on Black Friday What causes people to kick, shove and even stab each other on Black Friday? Each year there are reports of violence during the Black Friday ...

4 days ago
Views: 522 • Comments: 6
Tweets: 7 • Rating: 2
Lumberhead
One Man Should Not Dictate Immigration Policy
Well played. You know, the more I mull over the Republican complaint about how immigration reform is being implemented, the more I sympathize with them. Public policy, especially on big, hot button issues like immigration shouldn't be made by one ...

4 days, 19 hours ago
Views: 467 • Comments: 6
Tweets: 0 • Rating: 7
teleskiguy
“Chelsea Hotel” performed by Tal Wilkenfeld
I first saw Austrailian bass player Tal Wilkenfeld play with Jeff Beck (not live, mind you. On YouTube) and was amazed at her skills and chops. She was only 20 when she scored that gig. She's coming into her own ...

6 days, 16 hours ago
Views: 322 • Comments: 0
Tweets: 0 • Rating: 5
FemNaziBitch
History of Laws Concerning Immigration and Naturalization in the United States -WIKI
The United States Constitution was adopted on September 17, 1787. Article I, section 8, clause 4 of the Constitution expressly gives the United States Congress the power to establish a uniform rule of naturalization.[1] Pursuant to this power, Congress ...

1 week ago
Views: 445 • Comments: 1
Tweets: 1 • Rating: 3
MichaelJ
COMFORTABLY NUMB - Peahi Nov 12 on Vimeo
Channel angle of the Nov 12th swell at Peahi.

1 week, 3 days ago
Views: 581 • Comments: 0
Tweets: 1 • Rating: 2
Romantic Heretic
Money Makes Us Less Rational
Here's an interesting article on scientific studies that demonstrate how rationality and empathy break down is the presence of large amounts of money.

1 week, 6 days ago
Views: 792 • Comments: 2
Tweets: 0 • Rating: 2
 Frank says:

Never stop until your good becomes better, and your better becomes the best.