You're watching...
FBN’s Peter Barnes breaks down the latest report from the Congressional Budget Office showing the economy will shrink by 3% if the fiscal cliff occu...
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Straight -- up watch the news on these projections for the economy and jobs.
-- -- -- they Congressional Budget Office out with its latest forecast in the project projects that the deficit will shrink to 640 billion dollars next year from one point one trillion this year.
But that assumes that the fiscal cliff here in Washington.
Actually happens at the end of the year that all of the bush tax cuts expire.
And -- spending cuts mandated under last year's debt ceiling deal take a fact and as a result the CBO says that if that happens the economy will fall into a significant recession.
Next year contract by about.
500 billion dollars in the less the government spending.
And that would equal about 3% of GDP and that would send the unemployment rate back up to 9% all that assumes the congress does not act with the White House to.
Make changes in current.
Law start an -- get -- are they saying a million fewer jobs.
If we go about a million lost jobs one million.
If we go over that fiscal cliff the CBO is assuming we go over the cliff.
We look raise taxes we cut spending and they say the result of that will be one million fewer jobs and a recession is that correct.
That's right because it projects that the unemployment rate would go to about 9% from about eight eight point 3% now on that would equal more than a million jobs.
Now did it make any projection.
If you if you make the assumption that we do not go over the fiscal -- something happens to relieve -- all of the tax hikes in the spending cuts.
-- they make any projection in that event.
It does it has what it calls its alternative for its fiscal scenario and part of its job here is to give congress.
Lay out the options for it and so it assumes that on the bush -- tax cuts are extended.
That the spending cuts do not happen and as a result the economy would continue to grow at a moderate pace wasn't moderate pace today -- -- 2% as it last what -- -- yeah -- back to back to -- two point 2%.
Next year and then rising to I believe about 3% in the out years.
Okay Dana thank you very much indeed good stuff we appreciate it take a look at the big board because these numbers have been out for a couple minutes that we really.
Do not have any significant market reaction.
Remember please the CBO is projecting that if we go over that fiscal -- that -- -- raise taxes and cut spending we will head to a recession.
A million plus jobs will be taken out of the economy -- the unemployment rate goes to 9% that is if we go of the --
