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Recession in 2013?

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    RDQ Economics chief economist John Ryding explains why he's worried about going into a recession in 2013.

  • Duration 3:29
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All right let's turn now to the economy talk about growth check out this number three point.

-- 1% you know on the surface it just look at that that's what we had this morning at an annual rate for last quarter that's not bad.

But John writing RDQ economics is here now to say that recession.

Is believe it or not not off the -- people that's just if we go over the cliff John.

Well absolutely but only if we go over the cliff in 2013.

Because.

And a white -- that I'm not worried about the spending side to write a hundred billion dollars.

It's the tax side that's the real issue and if we go over the cliff for -- the how they can't face a tax hike -- equivalent to 3% of GDP.

In 2013.

When.

As -- economy's going to -- chief economist going to -- tickets -- 30% tax hit.

What we -- -- that but it but it can put at -- site and look at the numbers you've had they not only the GDP numbers.

Philadelphia effective in manufacturing activity in the home sales volume we're gonna talk about I think a little that are -- to -- these are old.

Good numbers down if you keep the economy chance we could have that 3% growth performance in 2013.

-- That is interest and if you give the economy -- chance that just basically means if you guys in Washington function if you come up with something if you look at it.

The way most of us sane people look at -- and well.

-- -- we can't get something perfect but let's figure this out for the time being.

And move -- however -- just brought up the other point on politics he says he'd rather see the sequester go into place because that's the only way were really cut spending so.

Maybe that does happen and that's from your point ideas economist probably not very -- right.

-- as I said it's the tax side more than the spending side the the fiscal cliff must agree that if -- -- only cliff -- tax that's that's there the -- you know.

Absolutely but then here's the problem if we go over the cliff.

An economy doesn't recession we don't make -- progress on closing the deficit either rights completely counterproductive -- characters that we have we we have contraction.

Tax revenues decline even -- tax rates go up.

And to me the debates and be much more about politics charted this about economics always just about.

Higher rates.

While -- opened higher tax revenues yeah it's about punishment.

Rather than incentive screw people -- -- pay more taxes but it left to pay more taxes what context of a growing economy and paying them -- to pricing.

Revenues right.

There's going to be an insistence on some sort of higher rates with -- it's 25400000.

One million dollars -- so down the line at some point do we come back to a Simpson -- like what what option.

I would hope so but it you know takes a crisis to prevent -- catastrophe in the US so.

Quite -- so.

We we haven't had the I haven't had the crisis shows Winston Churchill put it deputy -- Americans to the right think after the exhausted all other possibilities all the other -- -- the table getting dinner realistic.

Into this and end of the year.

What will we be the story on January 1 -- -- a wife still think we're going to get a good look.

That there's been movement right -- -- fifty -- got 400000.

And -- is accept the principle of higher rates from those making more than a million.

Those -- common ground in between if the president wants to get a deal done right but.

That's not clear at this point it will be politics from an economics that would cause.

The recession of 2013.

-- John good to see you thanks not happy new years -- we don't have -- before them.

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