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31 Dec 2012

USA: Experts Forecast the Cost of Failure to Compromise

http://finance.yahoo.com/news/experts-forecast-cost-failure-compromise-022928110.html

Experts Forecast the Cost of Failure to Compromise

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Even if President Obama and Republicans in Congress can reach a last-minute compromise that averts some tax increases before Monday's midnight deadline, experts still foresee a significant drag on the economy in the first half of 2013 from the fiscal impasse in Washington.
While negotiators in the capital focus on keeping Bush-era tax rates in place for all but the wealthiest Americans, other tax increases are expected to go into effect regardless of what happens in the coming days. For example, a two percentage point jump in payroll taxes for Social Security is all but certain after Jan. 1, a change that will equal an additional $2,000 from the paycheck of a worker earning $100,000 a year.
Many observers initially expected the lower payroll-tax deduction rate of 4.2 percent to be preserved. But in recent weeks, as it became clear that political leaders were prepared to let that rate rise to 6.2 percent, economists reduced their predictions for growth in the first quarter accordingly.
Largely because of this jump in payroll taxes, Nigel Gault, chief United States economist at IHS Global Insight, is halving his prediction for economic growth in the first quarter to 1 percent from an earlier estimate of just over 2 percent. That represents a significant slowdown in economic growth from the third quarter of 2012, when the economy expanded at an annual rate of 3.1 percent.
Mr. Obama has pushed to preserve Bush-era tax rates on income below $250,000 a year but Republicans have held out for a higher threshold, perhaps in the neighborhood of $400,000 a year. Republicans also favor deeper spending cuts to curb long-term budget deficits — a move many Democrats oppose.
While hopes dimmed Sunday afternoon that a deal could be reached before Jan. 1, most observers said they did not expect the full impact from more than $600 billion in potential tax increases and spending cuts to swamp the economy right away. Indeed, a compromise could be struck in the coming weeks that heads off the worst of the fallout.
In the event no compromise is found, however, the Congressional Budget Office and many private economists warn that the sudden pullback in spending and the rise in taxes would push the economy into recession in the first half of the year. Under this outcome, Mr. Gault said, the economy could shrink by 0.5 percent over all of 2013.
With the clock ticking, some observers bolstered their criticism of Washington. "If we have a recession, it's unforgivable," said Bernard Baumohl, chief global economist at the Economic Outlook Group. "For the first time in modern history, we will have a self-inflicted recession in the U.S."
Despite Washington's history of delaying fiscal compromises to the last possible minute — as in the fight over raising the debt ceiling in the summer of 2011 — investors had assumed until very recently that a deal would be completed before year-end.
But last week, stocks sold off as hopes for a quick compromise faded. More pressure on shares is expected beginning on Monday, especially if the fight does indeed slip into 2013. If anything forces politicians to act, Mr. Baumohl said, it could be a sell-off on Wall Street. "The politicians need to be pressed by markets to be forced to the table," he said.
Payroll managers at many companies are also watching the negotiations closely but have already prepared systems for the two percentage point change in payroll taxes, said Scott A. Schapiro, a principal at KPMG.
"We're primarily closed down from Christmas to New Year's," he said, "but our payroll folks are working. Payroll has to be around."
"This is one of the most obvious effects of the fiscal cliff," Mr. Schapiro added, "because it will affect all taxpayers." The Social Security payroll tax applies to the first $113,700 of annual income, he said. It was first cut by Congress in late 2010 to help give the economy a jolt, and was extended again last year to cover 2012.
Another big question mark is whether unemployment benefits for more than two million jobless Americans will be extended beyond Jan. 1. While there is still the possibility these payouts for the long-term unemployed will be preserved as the negotiations go down to the wire, failure to extend them would deliver another sizable blow to a still-fragile economy, experts said.
"This is not just an inside-the-Beltway-game," said Vincent Reinhart, chief United States economist at Morgan Stanley. "Both the payroll tax increase and the change in unemployment benefits would hit hand-to-mouth consumers hard. This has consequences for the whole economy."
Consumer spending is especially critical right now, because many businesses have pulled back already, citing the fiscal impasse in Washington as a prime concern. Until recently, consumers have been more optimistic about the economy, although sentiment has eroded in recent weeks as anxiety increased about just what policy makers would do in terms of taxes and spending.
If it were not for the uncertainty in Washington and the fallout from the fiscal impasse, Mr. Reinhart said, the economy would be growing at an annual rate of 2 percent to 2.5 percent. Instead, he estimated growth in the fourth quarter of 2012 at just under 1 percent, and said he expected it to edge up only slightly to around 1 percent in the first half of 2013. Unemployment, now at 7.7 percent, is about 0.3 percentage point higher than it otherwise would be, he added.
To be sure, the impact from some other scheduled changes will not be felt right away — and could still be reversed if a deal is completed in the coming weeks. For example, automatic spending cuts set to hit the Pentagon budget as well as nonmilitary programs are spread out between now and the end of the 2013 fiscal year in September, giving legislators time to change course and head off any major impact.
But the longer the standoff continues, the deeper the economic damage, experts said. "Because the politicians couldn't get out of the way," Mr. Reinhart said, "growth in the last quarter of 2012 and the first two quarters of 2013 will be below trend. There is a real cost of not coming to the table."
PHOTO: Shoppers in Atlanta. The confidence of consumers has eroded in the absence of a deal to avert a harsh budget package on Jan. 1. (PHOTOGRAPH BY DAVID GOLDMAN/ASSOCIATED PRESS) (B2)
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SUMMARY : THE TRAGIC CONSEQUENCES OF THE BRITISH BUDGET SUPPORT AND GEO-STRATEGIC AMBITIONS

United Kingdom's Proxy Wars in Africa: The Case of Rwanda and DR Congo:

The Rwandan genocide and 6,000,000 Congolese and Hutu refugees killed are the culminating point of a long UK’s battle to expand their influence to the African Great Lakes Region. UK supported Kagame’s guerrilla war by providing military support and money. The UK refused to intervene in Rwanda during the genocide to allow Kagame to take power by military means that triggered the genocide. Kagame’s fighters and their families were on the Ugandan payroll paid by UK budget support.


· 4 Heads of State assassinated in the francophone African Great Lakes Region.
· 2,000,000 people died in Hutu and Tutsi genocides in Rwanda, Burundi and RD.Congo.
· 600,000 Hutu refugees killed in R.D.Congo, Uganda, Central African Republic and Rep of Congo.
· 6,000,000 Congolese dead.
· 8,000,000 internal displaced people in Rwanda, Burundi and DR. Congo.
· 500,000 permanent Rwandan and Burundian Hutu refugees, and Congolese refugees around the world.
· English language expansion to Rwanda to replace the French language.
· 20,000 Kagame’s fighters paid salaries from the British Budget Support from 1986 to present.
· £500,000 of British taxpayer’s money paid, so far, to Kagame and his cronies through the budget support, SWAPs, Tutsi-dominated parliament, consultancy, British and Tutsi-owned NGOs.
· Kagame has paid back the British aid received to invade Rwanda and to strengthen his political power by joining the East African Community together with Burundi, joining the Commonwealth, imposing the English Language to Rwandans to replace the French language; helping the British to establish businesses and to access to jobs in Rwanda, and to exploit minerals in D.R.Congo.



Thousands of Hutu murdered by Kagame inside Rwanda, e.g. Kibeho massacres

Thousands of Hutu murdered by Kagame inside Rwanda, e.g. Kibeho massacres
Kagame killed 200,000 Hutus from all regions of the country, the elderly and children who were left by their relatives, the disabled were burned alive. Other thousands of people were killed in several camps of displaced persons including Kibeho camp. All these war crimes remain unpunished.The British news reporters were accompanying Kagame’s fighters on day-by-day basis and witnessed these massacres, but they never reported on this.

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25,000 Hutu bodies floated down River Akagera into Lake Victoria in Uganda.

25,000  Hutu bodies  floated down River Akagera into Lake Victoria in Uganda.
The British irrational, extremist, partisan,biased, one-sided media and politicians have disregarded Kagame war crimes e.g. the Kibeho camp massacres, massacres of innocents Hutu refugees in DR. Congo. The British media have been supporting Kagame since he invaded Rwanda by organising the propaganda against the French over the Rwandan genocide, suppressing the truth about the genocide and promoting the impunity of Kagame and his cronies in the African Great Lakes Region. For the British, Rwanda does not need democracy, Rwanda is the African Israel; and Kagame and his guerilla fighters are heroes.The extremist British news reporters including Fergal Keane, Chris Simpson, Chris McGreal, Mark Doyle, etc. continue to hate the Hutus communities and to polarise the Rwandan society.

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Kagame political ambitions triggered the genocide.

Kagame  political  ambitions triggered the genocide.
Kagame’s guerrilla war was aimed at accessing to power at any cost. He rejected all attempts and advice that could stop his military adventures including the cease-fire, political negotiations and cohabitation, and UN peacekeeping interventions. He ignored all warnings that could have helped him to manage the war without tragic consequences. Either you supported Kagame’ s wars and you are now his friend, or you were against his wars and you are his enemy. Therefore, Kagame as the Rwandan strong man now, you have to apologise to him for having been against his war and condemned his war crimes, or accept to be labelled as having been involved in the genocide. All key Kagame’s fighters who committed war crimes and crimes against humanity are the ones who hold key positions in Rwandan army and government for the last 15 years. They continue to be supported and advised by the British including Tony Blair, Andrew Mitchell MP, and the British army senior officials.

Aid that kills: The British Budget Support financed Museveni and Kagame’s wars in Rwanda and DRC.

Aid that kills: The British Budget Support  financed Museveni and Kagame’s wars in Rwanda and DRC.
Genocide propaganda and fabrications are used by the so-called British scholars, news reporters and investigative journalists to promote their CVs and to get income out of the genocide through the selling of their books, providing testimonies against the French, access to consultancy contracts from the UN and Kagame, and participation in conferences and lectures in Rwanda, UK and internationally about genocide. Genocide propaganda has become a lucrative business for Kagame and the British. Anyone who condemned or did not support Kagame’s war is now in jail in Rwanda under the gacaca courts system suuported by British tax payer's money, or his/she is on arrest warrant if he/she managed to flee the Kagame’s regime. Others have fled the country and are still fleeing now. Many others Rwandans are being persecuted in their own country. Kagame is waiting indefinitely for the apologies from other players who warn him or who wanted to help to ensure that political negotiations take place between Kagame and the former government he was fighting against. Britain continues to supply foreign aid to Kagame and his cronies with media reports highlighting economic successes of Rwanda. Such reports are flawed and are aimed at misleading the British public to justify the use of British taxpayers’ money. Kagame and his cronies continue to milk British taxpayers’ money under the British budget support. This started from 1986 through the British budget support to Uganda until now.

Dictator Kagame: No remorse for his unwise actions and ambitions that led to the Rwandan genocide.

Dictator Kagame: No remorse for his unwise actions and ambitions that led to the  Rwandan genocide.
No apologies yet to the Rwandan people. The assassination of President Juvenal Habyarimana by Kagame was the only gateway for Kagame to access power in Rwanda. The British media, politicians, and the so-called British scholars took the role of obstructing the search for the truth and justice; and of denying this assassination on behalf of General Kagame. General Paul Kagame has been obliging the whole world to apologise for his mistakes and war crimes. The UK’s way to apologise has been pumping massive aid into Rwanda's crony government and parliement; and supporting Kagame though media campaigns.

Fanatical, partisan, suspicious, childish and fawning relations between UK and Kagame

Fanatical, partisan, suspicious, childish and fawning relations between UK and Kagame
Kagame receives the British massive aid through the budget support, British excessive consultancy, sector wide programmes, the Tutsi-dominated parliament, British and Tutsi-owned NGOs; for political, economic and English language expansion to Rwanda. The British aid to Rwanda is not for all Rwandans. It is for Kagame himself and his Tutsi cronies.

Paul Kagame' actvities as former rebel

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