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Dire Warnings From CBO On Deficit and Potential for Double-Dip Recession

Thursday, August 23, 2012 13:32

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(Before It's News)

WASHINGTON – The U.S. government will run a budget deficit of $1.1 trillion in fiscal 2012, or 7.3% of gross domestic product, the Congressional Budget Office estimated in a new report on Wednesday. The new deficit estimate is slightly lower than the agency’s March estimate of $1.2 trillion. The nonpartisan CBO predicts that the U.S. economy will grow at a 2.1% clip in 2012, but fall by 0.5% between the fourth quarter of 2012 and the fourth quarter of 2013 if scheduled tax increases and spending cuts take effect in January. Under that “fiscal cliff,” the U.S. would experience a recession, with U.S. unemployment jumping to about 9% in the second half of 2013 from its current 8.3%, CBO said.