Will Washington Let the Economy Grow?
Posted at 12:45 p.m. on Dec. 17, 2012
“Economists see a number of sources of underlying strength in the economy, but for the growth to gain traction, they say, political leaders need to avoid the broad tax increases and spending cuts now being debated,” according to the New York Times.
“More robust growth next year — perhaps higher than 3 percent later in the year, according to some of the more optimistic forecasts — would certainly be a stark reversal from the current sluggish path… That dismal pace is driven partly by drags from Europe’s recession and China’s slowdown; partly by companies readjusting after potentially overstocking their back-room shelves in the third quarter; and largely by worries about the so-called fiscal cliff of spending cuts and tax increases set for early 2013.”
Bill McBride: “I expect the rate of growth to pickup next year, but I wouldn’t get too excited. Obviously there is going to be some more austerity in the US at the Federal level next year, and we need some reasonable resolution to the ‘fiscal cliff’.”