A UNO economist says the fiscal cliff might not have a significant impact on the nation’s unemployment rate.
Lawmakers and President Obama are trying to reach a deal to avoid the fiscal cliff before January first. That’s the date when a combination of tax increases and ten-percent across-the-board spending cuts take effect.
Chris Decker, professor of economics at UNO, says there are three possibilities. One is that lawmakers get a deal done before January first. Another is that a deal is reached shortly after that date, which Decker says could have a small impact on the economy. The third possibility, according to Decker, is that the spending cuts and tax increases take effect without a deal. If that happens, Decker thinks it could raise the unemployment rate and send the economy in to a recession.
Decker says the uncertainty businesses have right now about the fiscal cliff could show up in the December jobs numbers.
The unemployment rate is currently 7.7 percent at the national level and 3.9 percent in Nebraska.