Bloomberg BRIEF's Guide To The Fiscal Cliff Is The Best Summary That's Been Done Yet

Cliff

Photo: Wikimedia Commons

Bloomberg BRIEF — Bloomberg’s economics newsletter has put together a comprehensive slide deck about what happens if and when we go over the fiscal cliff .It’s scary.

Basically, consumers are not prepared, no matter what scenario emerges from Washington.

But there are also many different outcomes, depending on the knock-on effect for the economy that scenario would entail.

Read on to see how bad it could get.

Huge thanks to Bloomberg BRIEF for permission to run their feature.

ALSO: Catch Tom Keene interview with the presentation’s author Joseph Brusuelas today at 5 pm >

Going over the cliff will likely cause an instant recession

For instance, the expiration of the Bush tax cuts will blow out 1.3 per cent of GDP

Unemployment would climb back above 9 per cent

On the other hand, extending everything set to expire would boost GDP by 2.9 per cent

Eliminating tax breaks for the rich — a lynchpin of President Obama's — will barely affect the economy

We are again approaching the debt ceiling

Depending on how the fiscal cliff is resolved , there will be different knock-on effects to the economy from new income levels everyone will see

While economists disagree over how large a multiplier the country will see — even when they refer to the same outcomes — it is not likely to be small

In any event, here are Bloomberg's multiplier tables — for GDP growth rate...

And how much of a change that new rate would represent

Whatever the case, consumers are likely to get blindsided

Here's how to get more from Bloomberg

And here's our ultimate guide to the fiscal cliff...

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