Lesser of 2 evils – Cliff Deal hurts growth but avoid recession

The political deal to pull the US away from the “fiscal cliff” will hit economic growth and efforts to generate jobs, economists said Wednesday, but the country will avoid a feared recession.

Although not as severe as they could have been, tax increases on the country’s wealthiest two per cent and higher paycheck deductions for all workers agreed by political leaders will suck enough money out of the economy to significantly hold back growth in 2013, they said.

Moreover, politicians still face a battle over cutting federal spending — put off for two months in the wrangling over the cliff deal finally passed Tuesday — that could further crunch the economy this year.

Via – CNA

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