Economy is more or less treading water - FOX 29 News Philadelphia | WTXF-TV

Economy is more or less treading water

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WASHINGTON -

Economists think we'll see something of the neighborhood of 155,000 jobs created through the month of December.  That would be a small improvement form the month before, but probably not enough to change the 7.7 percent unemployment rate.

Friday's numbers may confirm what many Americans already think -- that the economy is more or less treading water.

And the payroll tax hike that's about to hit nearly all of us will make matters worse.

People spend less, businesses hire fewer workers.

And if many households are about to feel that their balance sheets are out of whack... They have nothing on Washington, where a new Congress was seated yesterday and House Speaker John Boehner was reelected.

"Our government has built up too much debt. Our economy is not producing enough jobs. These are not separate problems," said Boehner.

As the President asks Congress to raise the debt ceiling next month, there will be a furious fight over spending.

The President, on vacation in Hawaii, made it clear before he left that he will not budge.

"I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up."

The White House, though, pushed for a lot of that spending...  But if congress doesn't raise the ceiling, we could default... On the other hand if something isn't done to bring down the debt, the country could be rocked with a credit downgrade.

The warning just came from the ratings agency Moody's:

"The debt trajectory resulting from this process is likely to determine whether the Aaa rating is returned to a stable outlook or downgraded to Aa1."

And if that happens, if we're downgraded even one notch, our borrowing costs will go up. Meaning the debt would gobble up even more of the budget every single year.

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