Congress reconvened earlier this week with a massive amount of work that has to be addressed in a short period of time, the biggest issue is what’s been termed the ‘fiscal cliff’…a situation where among other things the Bush-era tax cuts will expire, including the inheritance tax, and many others. American Farm Bureau Federation’s Chief Economist Bob Young expands on the possibilities of congress reaching an agreement as well as the overall ag economy:
“I think a lot of it will depend on what come out of the lame duck session. If we come out of it and don’t really get a deal then it looks like we will actually fall off the cliff and the economy just chokes along because that uncertainty. If we do get even just the outlines of a deal, and it looks like there will be cooperation to get something done in the next session, then I think we will see the economy take off and we’ll get some regulatory reform. There is a lot of pent up growth out there right now. You can talk about the economy growing 4% just as easily as you can see it going into a recession next year.
A real crisis in addition to the fiscal cliff would be the debt limit. Things could get ugly and if they do the economy will just drag. We have just enough growth to keep us from going backwards.
The political situation is going to cause us to either turn negative or turn positive. If we continue this kind of dysfunctional family behavior then we will get another debt downgrade.
I think the agricultural sector at this time is in reasonable shape and is one of the bright spots.”
Bob Young, Chief Economist for the American Farm Bureau Federation in Washington, DC.