How Reid, McConnell, Boehner, Pelosi and Obama could shove us into another recession

[nebris]

by John Aravosis (DC) on 7/30/2011 06:55:00 PM

 

It's criminal the way politicians in Washington are ignoring the very real possibility that this budget deal could plunge us into another recession (just in time for Obama to lose re-election and Democrats to lose the Senate). From Bloomberg:

Congressional agreement on budget cuts could cause troubles of its own. Less spending by the Federal government would be “a real problem” for the economy, Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia, said in a July 29 interview on Bloomberg Television.

“We could see a growing risk of recession in the fourth quarter, early 2012, if in fact the federal government gets it together and makes aggressive budget cuts,” LeBas said.

Here's some pretty direct evidence that the stimulus did help the economy grow, and cut backs in federal spending helped the economy shrink (or at least grow at a smaller rate).

No one, and I mean no one, on the Hill, at the White House, anywhere is talking about what these grand bargains are going to do to the economy next year. I don't mean this as a personal shot, but it's easy to tell people to eat their spinach when you make a government guaranteed salary of $400,000 a year, or even a congressman's guaranteed salary of $174,000 a year.  It doesn't mean you don't care, but it does mean that the concern isn't personal, like it is for the rest of us.

If you're actually worried about how you're going to pay your mortgage, or feed your family, or stop your car from being repossessed, all this hysteria about cutting the deficit - and not just ignoring the economy, but actually proposing policies that may send us into another recession (a direction we're already heading) - doesn't sound all that grand at all.

Mark my words: No one, not Reid, McConnell, Boehner, Pelosi or Obama is willing to answer the simple question of what these grand bargains are going to do to the economy next year, and in the years to come.  And sadly, the media doesn't seem terribly interested either.