Falling off the fiscal cliff, even briefly, would be a bad idea
But the psychological damage if lawmakers head home for the holidays without averting the cliff could have lasting effects.
The lack of a year-end deal would unsettle consumers, businesses, and financial markets, says Ellen Zentner, senior U.S. economist at Nomura Securities International. The negativity could feed on itself, leading Americans to stop spending and businesses to stop hiring and investing. Even a temporary expiration of the cuts could lead to a quarter of negative growth in gross domestic product, Zentner says. Her firm already expects GDP growth to slow to a crawl in the first quarter, advancing by a mere 0.5 percent. Because consumer spending accounts for more than two-thirds of GDP, another drop in such spending could push the economy into a contraction.
Nervousness about the cliff has hampered growth in the business sector for several months. Business investment shrank 1.3 percent in the third quarter, the biggest drop since late 2009. The pullback in investment dovetails with a recent Business Roundtable survey that found pessimism of CEOs hitting a three-year high. Analysts found that fears about the fiscal cliff were driving much of the pessimism. Yet even though businesses have turned cautious, a complete Washington stalemate could still blindside Wall Street. “We don’t think the markets have it priced in whatsoever,” Zentner says. And if businesses are pessimistic now, imagine how they’ll feel if Congress plunges from the cliff.
Blowback
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Hope! Change!
x2!
Ca97 on November 8, 2012 at 4:48 PM
Let it burn.
nitzsche on November 8, 2012 at 4:49 PM
For anyone who wants to figure out what it’s like to live in the third world (starving, stinking, disease ridden, the strong abuse the weak) here’s a great opportunity.
Okay maybe not that bad, just say great depression living, anyone for that?
LincolntheHun on November 8, 2012 at 4:51 PM
The Dems let it burn in 2008 (after the 2006 elections).
Our turn.
faraway on November 8, 2012 at 4:52 PM
What does the GOP have to lose here by taking some bold and decisive measures?
What? Are we afraid they may start LOSING elections or something?
HondaV65 on November 8, 2012 at 4:52 PM
Yer gettin’ that one way or another anyway. You have your head in the sand if you think it can be avoided.
Read some of Mark Steyn’s writings – he’s been all through that.
HondaV65 on November 8, 2012 at 4:53 PM
Let the people get what they voted for. GOP vote present!
mrscullen on November 8, 2012 at 4:53 PM
Let it burn. +1
Time to play hard ball. We’ve got nothing to loose. The media will crucify us no matter what we do. Might as well get something productive out of it.
Iblis on November 8, 2012 at 4:54 PM
Go ahead and jump.
moonsbreath on November 8, 2012 at 4:54 PM
exactly.
the “demographics have shifted” so its about time the GOP starts targeting these voter blocks and explaining to them how the welfare state has destroyed their lives and their families.
joey24007 on November 8, 2012 at 4:55 PM
Am I the only one who thinks the whole fiscal cliff thing is overblown? I mean, the presumed effects of it are based on Keynesian assumptions. It seems to me that the anticipation will end up causing more damage than the actual spending cuts and tax hikes.
NukeRidingCowboy on November 8, 2012 at 4:55 PM
.
Hope you have a lot of food stored, and the ability to keep it, and can perform all of your own medicine and dental work, never need a firefighter, like not showering often, and are immune to disease.
Your better than the pettiness of let it burn.
LincolntheHun on November 8, 2012 at 4:55 PM
It seems like the Crony’s want their bailouts again.
Oil Can on November 8, 2012 at 4:55 PM
We’re already over the cliff.
Rep. Ron Paul, whose maverick presidential bids shook the GOP, said in the wake of this week’s elections that the country has already veered over the fiscal cliff and he sees no chance of righting ship in a country where too many people are dependent on government.
“We’re so far gone. We’re over the cliff,” the Texas Republican told Bloomberg Television’s “In the Loop” program. “We cannot get enough people in Congress in the next 5-10 years who will do wise things.”
Mr. Paul, who is retiring after 12 terms in the House, said voters on Tuesday rejected Mitt Romney because he had opposed the government bailout of General Motors and Chrysler.
“The people in the Midwest voted against him: ‘Oh, we have to be taken care of!’ So that vote was sort of like what we are laughing at in Greece,” Mr. Paul said.
“People do not want anything cut,” he said. “They want all the bailouts to come. They want the Fed to keep printing the money. And they don’t believe that we’ve gone off the cliff or are close to going off the cliff. They think we can patch it over, that we can somehow come up with some magic solution. But you can’t have a budgetary solution if you don’t change what the role of government should be. As long as you think we have to police the world and run this welfare state, all we are going to argue about is who will get the loot.”
Dante on November 8, 2012 at 4:56 PM
Would have been so much better had the GOP had the balls to shut the government down during the last debt ceiling debate.
But – they were too afraid they might lose an election.
LFMAO! They caved to Obama and things sure went smashingly on Tuesday didn’t they now?
Time for another strategy – what would BRAVEHEART do here?
HondaV65 on November 8, 2012 at 4:56 PM
Pushed off a cliff in the dark standing with our backs to the cliff we were told was a strong stone wall.
APACHEWHOKNOWS on November 8, 2012 at 4:56 PM
Too late, bubba! We’re going down! GERONIMO!
squint on November 8, 2012 at 4:57 PM
show his ass
faraway on November 8, 2012 at 4:57 PM
Braveheart would not have bad advisors near him as some seem to be.
APACHEWHOKNOWS on November 8, 2012 at 4:57 PM
Give the people what they voted for.
changer1701 on November 8, 2012 at 4:58 PM
Aside from screaming as he’s pulled apart? Not much.
squint on November 8, 2012 at 4:58 PM
Who the hell signed that crazy law anyway?
forest on November 8, 2012 at 4:58 PM
.
I’ve lived in the 3rd world. I seen the horror face-to-face. It’s why I appreciate America so much.
Your happy dance for anarchy is no different than Stalin’s useful idiots.
Hope you’re wrong or we’ll get to see evolution in action, or worse.
LincolntheHun on November 8, 2012 at 4:59 PM
And he’s exactly right. The Liberals had this little “Cloward-Pivven” thingie you see …
Problem is – it didn’t become successful until the capitalist goverment they opposed became socialist. Now, when the nation collapses – it’s not capitalism collapsing but their own socialism.
Let it collapse. When there’s no more money – there can be no more socialism. Rush says you can’t beat Santa. Well, when Santa’s bag is empty and there’s no more toys – you can kick Santa’s ass just as easily as any other fat man’s in the department store.
HondaV65 on November 8, 2012 at 4:59 PM
And I’m supposed to give a shit now? Let the light bringer save it for you. I quit.
MikeA on November 8, 2012 at 4:59 PM
LOL. Why does the headline make me so giggly?
El_Terrible on November 8, 2012 at 5:00 PM
You’re not even a real Conservative cuz you didn’t see the movie. Braveheart NEVER screamed – he just yelled … “FREEDOM!”
HondaV65 on November 8, 2012 at 5:01 PM
Not to worry, no big deal, just a cliff and a 100′ fall backwards.
Now too, do not worry, the Democrats will be able to float bonds on your credit to bail out all the crazy ass over spending their union brothers in California have put in the bank as assets and borrowed aginst prior.
No fraud here, moveon.org
APACHEWHOKNOWS on November 8, 2012 at 5:02 PM
Then Obama better cut some spending, and PDQ.
disa on November 8, 2012 at 5:02 PM
America free fallin
faraway on November 8, 2012 at 5:02 PM
Burn it down. Down to the ground.
Ted Torgerson on November 8, 2012 at 5:03 PM
At this point I really don’t care. Most of the voters decided to give the first affirmative action president another affirmative action do-over.
Any other president that nasty, dishonest and incompetent would have been defeated in a landslide. Instead we are all supposed to continue to give him the glowing accolades and unearned respect he’s enjoyed his entire life, when he has never accomplished one single damn thing.
He was hailed–and given votes–for being such a wonderful leader after the hurricane. He did a photo op. And for that he deserves re-election?
So let’s see President Fabulous stop the rise of the seas, heal the planet, and keep us from going over the fiscal cliff.
Meredith on November 8, 2012 at 5:03 PM
Oh please – I’ve travelled to the 3rd world A LOT more than you. I’ve spent more time there. I’m going to the Persian Gulf next week for another month there champ.
I’ll happy dance with anarchists while you give BBBJ’s to the Socialist m’kai?
HondaV65 on November 8, 2012 at 5:03 PM
.
No you’ll die; scared, alone, and in pain.
But at least you’ll get your wish.
LincolntheHun on November 8, 2012 at 5:07 PM
Keep in mind ye of the visiting liberals.
The master race up in D.C., they are not going to hand out the good blankets to you who voted in these chiefs, you will get the ones with the holes and a few smallpox germs. Not a new thing re: Reservation life ya know.
Winter comes, the herds of bison have been used for the re-election.
You may need a conservatives knowledge of how to make it to spring.
My time in nam caused a hearing problem. Seek elsewere.
APACHEWHOKNOWS on November 8, 2012 at 5:08 PM
Fixed for ya.
You’re the one that’s scared – I don’t fear this one bit.
HondaV65 on November 8, 2012 at 5:11 PM
Democrats and how they back up the U.S.A..
“Hell no we will not go.!”
Still the same, still the same commie draft dodger cowards.
APACHEWHOKNOWS on November 8, 2012 at 5:16 PM
Number 1: I did not know you had to watch Braveheart to be a real Conservative (dammit, I should’ve read that pamphlet!)
Number 2: I tried to see it once. Got bored and fell asleep.
Number 3: I’m sure he did more than scream “FREEDOM!” in real life when he was getting the business, but who knows?
Number 4: There is no number 4.
squint on November 8, 2012 at 5:18 PM
I know! I’m amazed at “conservatives” who refuse to see this. Leviathan will implode and very soon, and with Barry running the show, it will happen even sooner.
It’s also why it’s so good Romney lost, since Americans will blame whichever team is in the WH:
So congratulations to Captain Barry Obama of the USS Titanic! A Pyrrhic victory if there ever was.
Rae on November 8, 2012 at 5:18 PM
My wife says it’s like an alcoholic or drug addict. They are not going to change until they hit rock bottom.
I am so sad to say I am beginning to agree.
Droopy on November 8, 2012 at 5:22 PM
Storm the castle with a bunch of fat, toothless men carrying large pointed sticks?
UltimateBob on November 8, 2012 at 5:26 PM
Let it burn.
The Rogue Tomato on November 8, 2012 at 5:26 PM
Wow. Never thought I’d find a place that made me feel like a RINO in comparison, but here I am.
This conservative brand of nihilism is unappealing. Of course we have our flaws and fall very short when compared to the wonders of libertarian utopialand. By that metric we fail, but compare what we have to the rest of the world in the modern age or anywhere at any time in the past. By that metric, we do very well and still have something worth saving.
NukeRidingCowboy on November 8, 2012 at 5:34 PM
.
Good luck with that.
The real difference here between us?
I’m hoping I’m wrong, that we can ease down to sanity. Sudden shocks are raely good.
Your hoping anarchy leads to enlightenment.
There was a guy who thought that as well, first name was Karl. Never seemed to work out well in action.
LincolntheHun on November 8, 2012 at 5:39 PM
American voters are dumb and they deserve to face the consequences of ther acts. I say let Obama drive America to the cliff.
Falz on November 8, 2012 at 5:39 PM
I’m done. I’ve seen the light! I’m ready to surrender to the wisdom of the 52%. I worship the economic genius of Obama!! He will save us! He’s the smartest bestest PoTus ever! Relax… He’s got this in the bag!!!
JAM on November 8, 2012 at 5:47 PM
Give it a few years.
squint on November 8, 2012 at 5:49 PM
There are $84 trillion in unfunded liabilities for the US.
The US has a GDP of $15 trillion.
The nine banks are exposed to $228.72 trillion in derivatives… three times the entire world economy.
How is this cliff going to be avoided?
sharrukin on November 8, 2012 at 6:03 PM
Burn baby burn.
The Count on November 8, 2012 at 6:04 PM
Extend all the current rates or do nothing and let them expire. Don’t take up any other business in the House until an extension is signed by Obama.
And for God’s sake Boehner use your brain so you don’t get burned by Dingy Harry.
Wigglesworth on November 8, 2012 at 6:10 PM
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