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NYT: Economists warn cuts to federal spending ill-timed


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WASHINGTON — The nation’s political leaders agreed on Sunday to spend and invest less money in the American economy, a step that economists said risks the reversal of a faltering recovery, in the hope of improving the nation’s long-term prosperity.

The emerging outlines of a deal to cut spending by at least $2.4 trillion over 10 years, with a multibillion-dollar down payment later this year, would complete an about-face in the federal government’s role from outsize spending in the immediate aftermath of the recession to outsize cuts going forward.

Last week brought the disconcerting news that the economy grew no faster than the population during the first six months of the year, in part because of spending cuts by state and local governments. Now the federal government is cutting, too.

http://www.msnbc.msn.com/id/43966345/ns/politics-the_new_york_times/

I'm not an economist, but this makes too much sense to me. I feel like we are merrily walking into the belly of the beast.

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Going into an election the Republicans get exactly what they want. A wrecked economy so their guy gets to win.

Seems like I remember Pelosi and the Dem house trying to pass economic stimulus under Bush (no matter the outcome).

.

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Going into an election the Republicans get exactly what they want. A wrecked economy so their guy gets to win.

Seems like I remember Pelosi and the Dem house trying to pass economic stimulus under Bush (no matter the outcome).

.

You don't think voters will hold the tea party responsible for the economy if it takes a sharp downward turn now?

If the dems can't make the voters see that (if it happens), then they are too dumb to be in office.

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You don't think voters will hold the tea party responsible for the economy if it takes a sharp downward turn now?

If the dems can't make the voters see that (if it happens), then they are too dumb to be in office.

There is too much economic noise to demonstrate it clearly. So I don't agree with your second sentence.

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There is too much economic noise to demonstrate it clearly. So I don't agree with your second sentence.

Maybe you're right. But it seems like until now the GOP has successfully been able to blame Obama alone for the bad economy. I think they have had their turn now, and if it gets worse, voters will link the two. Maybe not though. IMO.

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“We sure missed a big window of opportunity to reduce our debt in those strong years when asset prices were booming,” said Carmen Reinhart, senior fellow at the Peterson Institute for International Economics and co-author of "This Time Is Different," a history of debt crises. “Instead we’re stuck trying to do it now, when the economy is so weak.”
Apparently we missed a big opportunity to reduce our debt when things were booming because we were spending so much to make things boom.
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Obama should be blamed. His lack of leadership is partly to blame. That said, he is no worse than Bush, and the Republicans have put no one up that could do a better job.

I have always been about balance. We are now going to far to the right again. Since no one will accept my original plan of "pain everywhere", I guess I have to settle for eliminating some of those Bush tax cuts for the rich. And, of course we have to cut spending. Need to look at defense as well. Bush never understood that you have to pay to protect the country. Can't have it both ways. And yes, Obama just carried the torch.

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Apparently we missed a big opportunity to reduce our debt when things were booming because we were spending so much to make things boom.

That really is the big problem as I see it. Cutting taxes at a time of great economic prosperity was, as McCain put it back then, reckless.

Politically, it's a hard sell for the Dems to blame "the GOP".

That works in polls, but it's too easy for Joe Sixpack to say "Yeah, but my Rep is the outlier."

It's much easier to blame Obama.

I guess this is the new spiel on this... the tea party is crazy, but my tea party congressman isn't. I don't know that there's any support for that at all, but go with what makes you sleep at night.

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That really is the big problem as I see it. Cutting taxes at a time of great economic prosperity was, as McCain put it back then, reckless.

I guess this is the new spiel on this... the tea party is crazy, but my tea party congressman isn't. I don't know that there's any support for that at all, but go with what makes you sleep at night.

How's that Hope and Change working for you guys?

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Apparently we missed a big opportunity to reduce our debt when things were booming because we were spending so much to make things boom.

You run surpluses during the good times and deficits during the bad times in order to combat big recessions. Since we spent our surplus when times were good, we had a lot less flexibility to combat the recession this time around

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Easier yet to blame Bush and 8 years of irresponsible economic leadership

Well, easy to blame someone that was in fact wrong. Easy to blame Obama now because he continued the lack of presidential leadership. I am not a Clinton fan, but I would take him or the older Bush over the current and previous presidents.

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You don't think voters will hold the tea party responsible for the economy if it takes a sharp downward turn now?

If the dems can't make the voters see that (if it happens), then they are too dumb to be in office.

Voters don't act rationally. If they don't feel the benefits of a recovery, they will look to somebody else. Obama will make this election a choice. Romney or whoever will make it a referendum. Believe me, the choice will be clear, but again, voters don't always vote with their heads.

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That certainly worked in 08. Probably a harder sell in 2012 to still blame Bush and the GOP when the Dems have been in charge for a full cycle.

Bush still gets the overwhelming majority of the blame for the economy being where it is today. Bush and Wall Street that is.

That doesn't mean people are happy with Obama right now, of course.

And another factor is that Americans really dislike Republicans right now. The GOP house has around a 20% approval rating.

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Easier yet to blame Bush and 8 years of irresponsible economic leadership

That's a cop out. Sorry, you wanted to be president, you got it, now fix it, stop blaming the other guy, take responsibility for leadership. Its not that hard.

That being said, Both parties really suck, we are in a bad situation and there is no painless way out of it, everyone needs to feel the pain.

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Spending cuts during an economic down turn is bad? No way...

The problem is that the GOP doesn't have a plan B. In case of surplus, cut taxes and spending on anything the democrats like. In case of deficit, cut taxes and spending on anything the democrats like. In case of alien invasion, cut taxes and spending on anything the democrats like. There is no thought or logic. It's purely political because the goals of the GOP aren't found on this issue. Their goal is to place big business in control of everything.

How's that Hope and Change working for you guys?

Significantly better than deregulation worked for the country.

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The hysteria is amusing coming from some ciricles. Most of the spending cuts are backloaded.

That's the hope...in addition to hoping some of the uncertainty resulting from this debate is lifted and businesses are a little more open to investing and consumers more open to spending now that all this has been resolved. At least, that is what the Obama administration is hoping will happen. The best they can get is probably a recovery that is real, but very slow moving. The worst case scenario is the economy falling back into a double-dip recession...

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More slogans and blame game.

Says the guy who opened with a slogan and justified blame from the outset.

As usual, the GOP thinks everyone is too stupid to see beyond the tripe that is heaped up out of the trough.

it works for their base.

~Bang

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