Experts: New US President Will Be Pressed to Save Country From ‘Fiscal Cliff’
By Andrei Shitov
Translated By Rebecca Banfield
7 November 2012
Edited by Victoria Denholm
Russia - Itar-Tass - Original Article (Russian)
Whoever becomes the new United States president following the general election will immediately have to go to work to save the country from falling off the “fiscal cliff.” The most important tool that can assist with this is the confidence of national and foreign experts that America’s economy is too big to fail. This opinion was expressed last Tuesday at a briefing hosted by a research organization in the United States business community, the Conference Board.
CB Analyst Katie Bostyanchin said the Conference Board predicts authorities won't allow a full-scale “fall from the cliff.”* As expected, the United States GDP growth rate will decrease to .5 percent annually by at least the first half of 2013 and will later rise from 2.5 to 2.8 percent.
These estimates are based on the prediction that sequestration of United States budget expenses, including the military, will be thwarted. In all fairness, Bostyanchin pointed out, both leading American political parties want to avoid this emergency. But from her point of view, for that to happen the United States will first have to adopt budget trickery, wherein the international profile agencies lower the American credit rating yet again. Second, the expected measures they will take will be more along the lines of mere palliatives.
“In our opinion, we aren't fully sitting on the fiscal cliff,” the specialist said. “The deadline for the tax cuts and unemployment benefits will indeed expire, but in December authorities will enact a ‘patch’ until February through March and will come to an agreement for the next six months to a year. That means solutions to these problems will be reached down the road, since politically there is yet to be a desire for a 'realistic' solution.”
Even many Americans view these expectations as overly optimistic. The country's political elite is split, and the pre-election campaign only aggravates its polarization. Specialists insist that there is almost no room for political compromise in these situations.
Bostyanchin also answered an Itar-Tass correspondent's question as to where she sees any room for optimism. The optimism of American consumers, in her opinion, now mostly stems from the fact that people simply don't understand what awaits them in the near future. As for American business, its confidence in the future will continue to decline. Supply and demand “are dwindling, as in a recession,” a leading briefing confirmed.
The threat of falling off the “fiscal cliff” is immense, the CB analyst concluded. “Can the collapse happen? A repeat of what happened when they tried to raise the debt ceiling? Without any doubt,” she emphasized.
* Editor's Note: This quote and all others, while accurately translated, could not be verified.
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