Without a deal, the combination of tax hikes and spending cuts would reduce Florida’s economic output by $16 billion by the fourth quarter of 2013 and lead to a loss of 130,000 to 140,000 jobs, according to a University of Florida economist.
That’s enough to set off a mild recession and an uptick in the state’s unemployment rate, said UF’s David Denslow, who made the projections after reviewing a Congressional Budget Office assessment of the nationwide impact and applying it to Florida.
On the other hand, he said, averting the cliff could have a rallying effect.
“The signal will be an increase in the stock market, giving people a little bit of a wealth effect,” Denslow said. “In Florida, the big problem is going to remain the housing market, which is stabilizing and improving to be sure, but as a [big] foreclosure state we’ve got a long pipeline to be worked out.”
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