Washington’s approach to the fiscal cliff: See no evil and speak no evil

Fiscal Cliff
President Obama, according to officials, plans to veto any attempts by Congress to avert an increase in taxes if those plans do not include an increase in taxes on the wealthy.

Chances of avoiding the year-end fiscal cliff – which is when a variety of tax cuts will expire – are dimming as Politico reports that President Obama and House Speaker John Boehner have yet to hold discussions on a resolution.

Dean Baker of the Center for Economic and Policy Research says that a failure to avoid the fiscal cliff “will likely slow the economy, but not derail the recovery. I suspect the effect on the housing market will be very limited.”

Weekly Jobless Claims Rise
The adage that a week in politics is a lifetime also applies to the up-and-down economy. On Thursday, the Labor Department reported that weekly applications for unemployment benefits jumped 46,000 last week to a seasonally adjusted 388,000. CNBC reports that the rise wipes out last week’s gains and that both swings were largely due to technical factors.

China’s GDP Falls Again
The Wall Street Journal reports that China’s GDP fell from 7.6% in the second quarter to 7.4% in the third quarter compared with a year earlier, which marks the seventh consecutive deceleration.

In related news, a Pew Research Center study finds that inequality and corruption are growing concerns among Chinese citizens. About half now say the gap between rich and poor is a very big problem, and roughly eight-in-ten agree with the view that in China the “rich just get richer while the poor get poorer.”

Quick Hits
The impact of tax cuts on the economy from Kennedy to Bush.

A new report shows that the food crisis in Sudan is worsening – a critical situation reflected in the fact more than 80 percent of people living in crisis zones eat one meal per day.

Could the election come down to views on the government’s approach to providing benefits and to whom they are given?

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