Arizona’s economy will take a heavy hit if the federal government is unable to avoid the fiscal cliff, Valley economist Elliott Pollack tells KTAR’s Jim Cross.
He said the nation would go into another recession, Arizona would lose about 50,000 jobs tied to the defense industry and people would put the clamps on spending to offset higher taxes.
But, Pollack said, it is all preventable.
“It has turned quite real,” he said. “It hasn’t been dealt with. If we go into a recession, it will be a crime in my opinion. Say what you want about politicians, but historically they get in a backroom and work out a deal that is best for Americans.
“This time around they have not done that. They’re too stuck in their ways both Republicans and Democrats to make the compromise to get things going.”
The Tax Policy Center estimates failing to reach a deal before the cliff would cost every U.S. household about $3,500. A typical middle-income family would see taxes rise by about $2,000. Those in the top 1 percent would pay an additional $120,000.
“If the Bush tax cuts go away, it would cost the economy $330 billion in 2013,” said Pollack.
Large tax increases and spending cuts would kick in Jan. 2, 2013 if President Obama and Congress cannot reach a budget deal.
