Federal spending cuts would mean lower economic growth and less job creation

Federal spending cuts would mean lower economic growth and less job creation

Moody’s Analytics chief economist Mark Zandi is out with new analysis warning that a House Republican proposal to cut approximately $61 billion in federal spending this year below current levels would create drag on an economy struggling to recover. Warning against cutting too much too soon, Zandi writes,

If fully adopted, the cuts would shave almost half a percentage point from real GDP growth in 2011 and another 0.2 percentage point in 2012. There would be almost 400,000 fewer U.S. jobs by the end of 2011 than without the cuts and some 700,000 fewer jobs by the end of 2012.

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http://minnesotabudgetbites.org/2011/03/03/federal-spending-cuts-would-mean-lower-economic-growth-and-less-job-creation/