How does the fiscal cliff affect Georgia? - WLTZ 38 | Columbus Georgia Regional News & Community

How does the fiscal cliff affect Georgia?

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By Sara Belsole

COLUMBUS, GA    What is it about the fiscal cliff that makes it so confusing to economists, lawmakers and constituents alike?

"I assume it refers to the ridiculous amount of debt the US has," resident Cody Wolfgang says.

"A lot of economists don't even have a clear definition of it because it's so many things jumbled together," University of Georgia Director of Economic Forecasting, Jeffrey Humphreys, says.

You've got the payroll tax cuts, marriage penalty relief, and unemployment benefits--just to name a few--all rolled into that big jumble.

"Bottom line is it is at least 4% of GDP and that's enough to push the economy back into recession," Humphreys says.

"It's this huge heavy problem looming that no one in Washington wants to deal with," Wolfgang says.

So what does that mean for Georgia?

"Georgia is probably no more or less vulnerable to the fiscal cliff because we don't receive that much more government spending per person than does the average state," Humphreys says.

But economists say Georgia is more vulnerable to the sequester than other states.

"Because that targets the DOD budget and Georgia has a lot of military bases so we would get hit very hard if that portion of the cliff were to go forward," Humphreys says.

If America doesn't slip off the edge of the fiscal cliff, things could be looking good for Georgians going into the new year.

"We expect job growth to accelerate a little bit in Georgia, we will outpace the nation for the first time in over a decade," Humphreys says.

Just last week President Obama proposed more than $1 trillion in tax increases and $600 billion in budget cuts over the next ten years. The Republicans rejected the proposal.
 

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