Huge cuts could imperil recovery, economists say

[Forkboy]

The massive federal spending cuts that will follow the deficit reduction deal could further weaken a national economy that has been rapidly losing momentum, economists said.

While few forecast an imminent downturn, they said the withdrawal of hundreds of billions of federal dollars comes at a bad time. Over the past few months, hiring has ground almost to a halt, the unemployment rate has resumed an upward trend, and overall economic growth has been barely positive.

Yesterday, the Commerce Department reported that consumer spending, which accounts for more than two-thirds of the nation’s economic activity, fell for the first time in nearly two years.

“That was a surprise it was so bad,’’ said Kenneth Rogoff, a Harvard economics professor. “If consumption is weak, what are businesses going to do? We’re certainly at a vulnerable point.’’



http://www.boston.com/business/articles/2011/08/03/huge_cuts_could_imperil_recovery_economists_say/

[Demeter]

1. What recovery?

Inquiring minds want to know.

[Forkboy]

2. I thought the exact same thing.

[chill_wind]

3. Kenneth Rogoff is keenly "surprised".

I'm willing to bet there are plenty of guys out there who aren't.

Like maybe Stiglitz, for example.

Rogoff was also in the spotlight because of his dispute with Joseph Stiglitz, a former Chief Economist of the World Bank and 2001 Nobel Prize winner. The dispute was triggered by the critique made by Stiglitz on the International Monetary Fund. Rogoff, in response to the critique, wrote an Open Letter To Joseph Stiglitz.

http://en.wikipedia.org/wiki/Kenneth_Rogoff

His extremely pompously peeved letter.

http://www.imf.org/external/np/vc/2002/070202.htm

Master Chess champion, too. Hmm.

[EFerrari]

4. Who could have ever imagined that taking money out of the economy

would imperil recovery?

[blkmusclmachine]

5. Yes, "austerity" will have its intended consequences.

n/t

[Javaman]

6. There needs to be a recovery first.

however, that aside.

These cuts are basically going to fuck this nation hard, very hard.

[mmonk]

7. Yes, the lid has been put on any recovery.

I don't know what I'll be doing going forward.