Politico: Republicans push for budget cuts to slow growth and raise unemployment

CEPR’s blog:

Okay, Politico only said the first part. However it would have been useful to remind readers of the second part since some may not realize that in the current economic environment cutting the budget will hurt the economy.

In an economy that is near full employment, budget cuts can free up resources for the private sector. However in an economy that is operating at close to $1 trillion below its potential, with extraordinary low interest rates, it is implausible that cutting the budget would lead to increased investment or consumption by the private sector. Therefore the effect of the Republican proposals for cutting the budget would be slower growth and higher unemployment.

If it was being responsible, Politico would remind readers of this fact.

One Response to Politico: Republicans push for budget cuts to slow growth and raise unemployment

  1. imhotep October 3, 2013 at 11:34 am #

    Why do you suppose the Republicans want slower growth and higher unemployment? It seems counterintuitive. Unless it’s being used as a tactic in a larger plan. Like winning the 2014 election by claiming that ObamaCare and the Democrats are destroying the economy. Those lousy Socialist Democrats want to take away your freedom the Republicans will say. Here’s a bit of proof. Yesterday Israel’s hardline Zionist P.M. Benny Netanyahu again shot off his mouth without first engaging his brain. He accused those who support the leader of Iran, the Ayatollah Ali Khamenei, of being members of a “cult.” As if Judaism isn’t a cult. A 6000 year old religious cult that became so corrupt it moved a Jewish reformer, the Rabbi called Jesus, to action. Christ’s Jewish followers founded Christianity. That religious cult itself became so corrupt that a reformer named Mohammed created Islam. A religious cult developed to replace both Judaism and Christianity. What does any of this have to do with the topic at hand? Well, Netanyahu like all of our politicians will tell as many lies and cause as much pain as they must to get and keep power.

Site Meter