We Are Approaching a Cliff Too, Just Like Europe

As we watch Europe fall off a cliff, let’s not forget that we ourselves will take a plunge on January 1 unless Congress pulls us back.

The CBO has gamed out three scenarios.  If the Bush tax cuts expire and the automatic cuts in domestic and defense spending take effect, GDP will fall 1.3% between the fourth quarter of 2012 and the second quarter of 2013.  So we’re talking another recession.

If the Bush tax cuts are extended, the payroll tax cut expires, and the automatic spending cuts don’t happen, GDP will grow by 1.7% in the same time frame.  No new recession, but not great growth either.

If we keep on the same path, with all tax cuts extended (Bush and payroll) and no automatic spending cuts, GDP will grow by 5.3%.

I’m with Option 3.  Let’s get some solid growth, and then we can deal with the deficits and national debt.

 

GOP Caves on Extending Payroll Tax Cut

The GOP congressional leadership has caved on extending the payroll tax cut, set to expire at the end of February, for the rest of the year without offsetting budget cuts.

Much as they’d love to see the economy get worse this year to hurt President Obama’s re-election chances, they don’t want the blame for Americans seeing their taxes go up next month.

Mitt Romney Flips on the Payroll Tax

Waaaay back in October, Mitt Romney opposed extending the payroll tax cut that’s set to expire at the end of this year.

But today, he supported extending it.

For this one, his primary rivals and President Obama won’t have to go searching for tape from 1994.  The man can’t hold a position for much more than a month.

He really has only two beliefs — he should be president, and he’s going to get his own planet when he dies.  If he could get his own planet now, I would chip in for the rocket fuel.