Often lost in the daily hubbub of the 2012 horse race is the proverbial sword of Damocles hovering over the nation’s economy. The CBO sounds the alarm. Again:
The nonpartisan Congressional Budget Office on Wednesday warned the economy will enter a recession next year if the country goes over the so-called fiscal cliff. In its most dire warning yet about the fiscal cliff, the CBO said the economy would contract by 0.5 percent in calendar year 2013 if the George W. Bush-era tax rates expire and automatic spending cuts are implemented. Unemployment also would rise from 8.2 percent in 2012 to 9.1 percent next year, the office estimates … Under current law, there will be 2 million fewer jobs if the fiscal cliff is allowed to take place, and said most of the contraction is due to the tax increases.