AP: US economy could withstand brief fall off 'cliff'

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http://hosted.ap.org/dynamic/stories/U/US_FISCAL_CLIFF_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT

US economy could withstand brief fall off 'cliff'
By CHRISTOPHER S. RUGABER
AP Economics Writer

WASHINGTON (AP) -- It's the scenario that's been spooking employers and investors and slowing the U.S. economy:

Congress and the White House fail to strike a budget deal by New Year's Day. Their stalemate triggers sharp tax increases and spending cuts. Those measures shrink consumer spending, stifle job growth, topple stock prices and push the economy off a "fiscal cliff" and into recession.

The reality may be a lot less bleak...

"The simple conclusion that going off the cliff necessarily means a recession next year is wrong," says Lewis Alexander, an economist at Nomura Securities. "It will ultimately depend on how long the policies are in place." ...

[Proud Liberal Dem]

1. Especially since it's not even technically a cliff

but rather a slope. There's nothing that can happen that can't be corrected in fairly short order once the next Congress gets seated. Though, one has to wonder why Congress set up things to happen like this if they knew it was going to create a disaster. My only theory is that Republicans figured that they wouldn't have to go through with it because they were going to sweep the House, Senate, and WH and be able to extend the Bush Tax Cuts (or make them "permanent&quot and renege on the sequestration at the first of the year. Things did not go as planned for them. How's that "we got 98% of what we wanted" looking right now, Mr. Boehner?

[AlexSatan]

3. Except for all of the contractors

who lose their jobs 1 Jan and the others in the following two months as money is pulled back from existing contracts.

[vi5]

2. Of course it would

That's why there is such a panic in the Villager media over it. They know that if we "go over" the "cliff" that the Democrats gain even more of an upper hand than they have now. The upper tax rates expire and it puts the pressure on the GOP to cut taxes on the majority of Americans but not the top. Defense cuts go into effect. Any new tax cuts become "The Obama Tax Cuts".

The people making it out as though the world ends on 1/1/13 because of this is ridiculous.