For months  economists have been warning that the President’s economic policies could be driving the US into a “double-dip” recession.

A “double-dip” recession, occurs when the economy has a recession, emerges from the recession for a short period of growth, and quickly falls back into recession. The recession of the early 1980s is an example of a W-shaped recession. The economy fell into recession from January 1980 to July 1980, shrinking at an 8 percent annual rate from April to June of 1980. The economy then entered a quick period of growth, and in the first three months of 1981 grew at an 8.4 percent annual rate. As the Federal Reserve under Paul Volcker raised interest rates to fight inflation, and economy dipped back into recession from July 1981 to November 1982.

The signs are already there, Unemployment continues to rise, and today in an unexpected announcement we learn that housing starts decreased 10.6% to a seasonally adjusted while economists surveyed by Dow Jones Newswires had forecast a 1.7% increase. The 10.6% fall carried construction to the lowest point in six months, building permits in October fell 4.0% to a 552,000 annual rate, economists had expected permits to rise by 0.9%. Building permits are a sign of future construction therefore this is a sign of a continued slowdown in the construction market.

President Obama may finally be getting the message, in an interview with Fox news to be aired tonight, the POTUS says that if we don’t get hold of the deficit we may fall into a double-dip recession, and the way to avoid it,is tax cuts for small businesses:

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Obama: Debt Could Fuel ‘Double-Dip Recession’


In an interview with Fox News, President Obama also warns that Israel’s move to build hundreds of new settlements in a Palestinian area is not helpful to ongoing peace talks, and is potentially “dangerous.”

The United States’ climbing national debt could drag the country into a “double-dip recession,” President Obama warned in an interview with Fox News Wednesday from China, though he said he’s still considering additional tax incentives for businesses to reverse the rising unemployment rate.

The president, who is in Beijing as part of his tour through several Asian countries to address economic challenges, spoke candidly about the precarious balancing act his administration is trying to perform. He wants to spend money to kick-start the economy, but at the same time is in danger of creating too much red ink.

“There may be some tax provisions that can encourage businesses to hire sooner rather than sitting on the sidelines. So we’re taking a look at those,” Obama told Fox News’ Major Garrett.

“I think it is important, though, to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession.”

Watch the Fox News interview with Obama at 6 p.m. ET on “Special Report With Bret Baier.”

Economic issues were on the front-burner in China, which is the United States’ biggest government lender. But Obama addressed several other domestic and international challenges during the wide-ranging interview with Fox News.

Though the administration is widely expected to miss its self-imposed January 2010 deadline for shuttering the Guantanamo Bay detention camp, Obama said he still expects to close it next year.

“We are on a path and a process where I would anticipate that Guantanamo will be closed next year,” he said. “I’m not going to set an exact date because a lot of this is also going to depend upon cooperation from Congress.”

….And the president said that despite the federal government’s massive stake in General Motors, his administration will not weigh in on the possibility that GM could direct bailout funds toward its European Opel unit.

“We are not going to meddle in GM’s decisions,” Obama said. “We are a shareholder but we are not an active shareholder. We have specifically said that we are not in the business of running a car company. We’re not getting involved in day-to-day management.”

He said the Detroit automaker owes the U.S. government money, but that “we want to get out of that business as soon as possible” and encourage repayment.

 Of Course any small business tax cut will be more than offset by the draconian taxes prescribed by the Obamacare and the Cap and Trade plans.  Also note that this is the President’s first interview on Fox in a long time, he could be saying “tax cut” to appeal to his perception of the Fox Audience.

Talk is Cheap, lets see if the POTUS follows up on his words.