Credit Suisse Pessimistic About Debt Crisis
Last year, when the debt ceiling crisis put the U.S. government on the brink of default on trillions of public borrowings, Republicans and Democrats came to a
last-minute agreement to cut $2.4 trillion in spending over the next decade beginning in January 2013.
Much of the detail of those spending reductions has been left to a special
Congressional committee, but as currently proposed, they would end the Bush-era tax cuts and mandatory federal spending cuts imposed by compromise legislation last year.
But according to
Credit Suisse economist Dr. Neal Soss, the compromise plan would have the effect of chopping nearly 4 percentage points off the gross domestic product and tossing the country back into another
recession. That’s why Soss and others believe the government will come up with another plan.
“Most of the forecasting community has said ‘no we won’t do
it’,” Soss told attendees at the TVB Forward Conference in New York on Wednesday.
Other groups such as the International Monetary Fund have urged the U.S. to address the
so-called “fiscal cliff” that awaits the American economy when the current plan is set to kick in at the beginning of next year.
Still, Soss claims that whatever plan is
embraced will have a negative impact on GDP. He believes that a revised plan would have a “less than recessionary” effect of around 1.5%.
The IMF and other groups have recently
downgraded their estimates for GDP growth for the U.S. this year and next. The IMF now says U.S. GDP will grow 2% this year and 2.25% in 2013.
Those estimates parallel recent downgrades of
ad spending growth and a prediction earlier this week by Pivotal Research senior analyst Brian Wieser that the advertising environment will remain tough until the latter part of 2013.
Recent MediaDailyNews Articles
-
3 Innovation Lions Awarded, Barbarian Grabs Grand Prix June 19, 1:33 p.m.
The Barbarian Group has won the Lions Grand Prix Award for Innovation, a new award category ... -
Cable Upfront Begins, Final Take Projected At $9.8B June 19, 12:07 p.m.
Following most of the broadcast upfront deal-making, many cable networks have started doing upfront pacts in ... -
Shazam Launches Service To Measure TV Campaigns June 19, 10:49 a.m.
On the heels of other social media apps looking to help out TV brand advertisers with ... -
GM Returns To Oscars, Drives 5-Year Deal June 19, 10:19 a.m.
General Motors and the Oscars telecast are back in business.The Detroit carmaker said Wednesday that it ... -
GM Returns To Oscars, Drives 5-Year Deal June 19, 10:16 a.m.
General Motors and the Oscars telecast are back in business.The Detroit carmaker said Wednesday that it ... -
Cannes King: Omnicom Earns Most Medals, Media Agency Of Year June 19, 9:34 a.m.
Omnicom’s OMD Worldwide was the most medaled media network at the Cannes ad festival this year, ... -
Consumers Tag Costco, Movado As Most Promising Brands June 18, 6:09 p.m.
Costco, Cisco and Movado are the three most financially promising pure-play, publicly traded brands in the ... -
'Voice' Sings To Consistent Beat June 18, 5:57 p.m.
One of the biggest shows on broadcast television finished its spring edition pretty close to where ... -
'Jimmy Kimmel,' Myspace Promote Musicians June 18, 2:56 p.m.
Select artists that appear on TV late-night show “Jimmy Kimmel Live” will get to perform an ... -
W+K Amsterdam's Heineken Ad Wins Cannes Lions Grand Prix, Creative June 18, 11:31 a.m.
A Heineken ad campaign from Wieden + Kennedy Amsterdam, the brand’s first global campaign effort, has ...
1 comment on "Credit Suisse Pessimistic About Debt Crisis".
Leave a Comment