ATLANTA (AP/WAOK) – The Economic Forecasting Center at Georgia State University predicts the national economy will lag until Congress reaches a long-term agreement on federal taxes and spending. Unemployment, meanwhile, will stay above 8 percent until at least the middle of 2014, according to center’s latest quarterly report.
Analysts say the Capitol Hill stalemate makes businesses and individuals reluctant to spend, particularly on big-ticket items. That uncertainty means real GDP growth will continue to slide through at least early 2013, the center said, picking up only after an agreement.
The fear revolves around the so-called fiscal cliff at the end of 2012. That is Congress’s self-imposed deadline for a deal. If there is no agreement, a host of automatic tax hikes and spending cuts go into effect before a new Congress convenes.