The US fiscal cliff is so-called because it is a scything, indiscriminate sucking of money out of the economy by the government, to pay its bills.
The result say many is USA Inc. will take a massive hit, and lost revenues, wasted investments and costs of massive unemployment will far outweigh the savings on the public purse.
If deficit reduction is the sole aim of Capitol Hill then the cliff does not look so bad, slashing much of the debt at a stroke.
But nearly every economist agrees it would place a huge new strain on the American consumer and the wider economy when recovery appears so fragile, and strangling growth will do nothing to pay the bills long-term. Better to have more people working paying tax than wring more out of those clinging to jobs, say many.
But that is what the cliff will do, and the double whammy to go with tax rises is public spending cuts. Together they are forecast to contract economic growth by half a percent next year, and add another percent to the unemployment rate.
More and more companies sensing disaster in just five days time are trying to get things moving. Starbuck’s 120 stores in Washington are urging customers to write “Come Together” on their cups to encourage the Democrats and Republicans to settle their differences.
Copyright © 2014 euronewsMore about:
- 1Air France strike is latest turbulence among Europe’s airlines
- 2Hungary’s healthfood king takes his sugarfree, low carb company public
- 3Rouble slips lower, finance ministry comments check losses
- 4Ripple effect of Scotland’s independence vote on Mideast markets
- 5GM’s Opel cuts Russian production on slumping sales
- 1Hungary’s healthfood king takes his sugarfree, low carb company public
- 2GM’s Opel cuts Russian production on slumping sales
- 3Ripple effect of Scotland’s independence vote on Mideast markets
- 4Microsoft looks to Minecraft for Windows phone boost
- 5Air France strike is latest turbulence among Europe’s airlines
- 1Podemos: Spanish indignation in Brussels’ corridors of power | euronews, reporter
- 2Israel announces it will seize 400 acres in West Bank | euronews, world news
- 3Japan sounds bluefin warning, calls for 50% catch cut | euronews, world news
- 4Hoverbike on the horizon | euronews, hi-tech
- 5China executes eight Muslims convicted of terrorism | euronews, world news
- 63D printing: a driving force in design and engineering | euronews, hi-tech
- 7Watch: Angry mob throw Ukraine MP into rubbish bin | euronews, world news
- 8Ukraine accuses Russian aid convoy of stealing factory equipment | euronews, world news
- 9#ن: How an Arabic letter was reclaimed to support Iraq’s persecuted Christians | euronews, world news
- 10Young Yazidi girl escapes Islamic State kidnappers | euronews, world news
- 11New car offers freedom for disabled drivers | euronews, hi-tech
- 12EU leaders name Donald Tusk European Council president | euronews, world news
- 13The business benefits of EU chemical regulation | euronews, business planet
- 14Turkish ferry makes high-speed final landing | euronews, no comment
- 15Risk of fresh ash cloud threatens European air travel | euronews, world news
- 16Canada sends hilarious barb to Russia over Ukraine ‘incursions’ | euronews, world news
- 17Man, 27, fails in suicide bid after tigers reject chance to eat him | euronews, world news
- 18Iceland warns Europe’s airlines of possible volcanic eruption | euronews, world news
- 19Thousands of Catalans call for choice on split from Spain | euronews, world news
- 20Iceland puts on a show as two of its volcanoes spew out lava | euronews, world news
Wires > Business
- 07:10 CET Credit Suisse loans under US Fed scrutiny – WSJ
- 07:03 CET Fed could hint on rate-hike plans as it prepares for policy turn
- 06:11 CET ‘Forced labour’ rife in Malaysian electronics factories – report
- 06:03 CET Qatar Airways takes delivery of its first Airbus A380
- 05:56 CET Germany-listed Ultrasonic says top China executives missing, cash…
- 05:24 CET Asia shares rise on Fed, China policy speculation
- 05:10 CET China, Singapore slowdown weigh on third quarter Asia business…
- 05:08 CET China, Singapore slowdown weigh on Q3 Asia business sentiment