US economy is to face recession in 2013US Congressional Budget Office warns the country may fall into recession next year if it implements plans to cut spending and end its low tax policy. Budget Office said on Wednesday that the current tightening plan would reduce the budget deficit by almost 500 billion dollars compared to the previous year. This would bring the shortfall to just above 640 billion dollars for the fiscal year through September 2013.
But it says such sudden belt-tightening would result in an economic contraction of half-a-percent in the fourth quarter of next year, compared to a year earlier.The Office says the jobless rate would rise to about 9 percent in the second half of 2013. It’s currently in the 8 percent range.Democrats and Republicans have separately submitted bills to avoid falling off the so-called “fiscal cliff.” Media agencies