What’s Ahead For The 2013 Economy?
The economy in the coming new year has one Jersey analyst seeing a, “blizzard of uncertainty.” And yes, a lot of it has to do with the fiscal cliff and whether we all go over it.
The fiscal cliff is rapidly becoming a household term, those tax cuts and spending cuts, that will all expire at year’s end and force you and I to pay a lot more.
Economic Analyst Patrick O’Keefe of CohnReznick in Roseland said, “Where we are anticipating probably two percent real growth going into the year without the cliff, if we go off the cliff, that could very easily be minus two to three percent performance.”
O’Keefe said the cliff itself is simply what he calls the, “cutting edge” of unsustainable fiscal imbalances that we face here in the U.S. He says that whether politically, or by way of the financial markets, the country will, in the not-too-distant future, have to come to grips with these ‘yawning’ defecits that we have been running.
O’Keefe said on top of that, we have in the Eurozone, a continuing melodrama with respect to the Euro and the ability of some of the perepheral countries to stay within the Euro and if any leave, it becomes highly disruptive to demand in Europe. And we export a lot of goods to Europe from the United States.
He said we also see slowing activity in some of the key emerging economies, such as China and Brazil and India. All of those are question marks. They may resolve themselves in a benign fashion.
But, unlike the Y2K phenomonem, which passed with little if any disruption, O’Keefe said the momentum that we see in all of these different economic spheres is going to, at a minimum, restrain the rate of growth in 2013.