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News Link • Economy - Economics USA

Pretty Soon, We Need To Start Talking A LOT About This Budget Chart

• http://www.businessinsider.com, Joe Weisenthal
 

We just had the pleasure of attending a briefing by Nomura US economist Lewis Alexander on the outlook for the rest of the year, and the implications of the coming election.

We'll talk about more of the points later on, but one interesting thing we learned is that investors are interested in the 2013 budget "fiscal cliff" a lot earlier than Alexander expected. He had assumed people would start focusing on it later this year, but there's already tons of interest.

And it could be big.

This chart is in a slide presentation that we were given, and it shows that in theory if everything kicked in all at once (spending cuts, tax hikes, etc.) the fiscal drag could be 5% of GDP!

That's a really big deal, and could easily put us into a recession.



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