Salient to Investors:
Martin Feldstein at Harvard said:
- The US economy would still be perilously close to a recession in 2013 even if we don’t go over the fiscal cliff.
- The end of payroll tax cuts will reduce GDP by 1 percent, and other tax increases and spending cuts may bring over 2 percent of GDP tightening.
- Congress should not raise tax rates but increase revenue by restricting deductions and credits in the tax code for such things as mortgage interest and investments in renewable energy.
- The fiscal cliff would be a disaster and would push the economy into a serious recession.