Economists Say Fiscal Disorder Weighs Down Economy
A survey finds that business economists see Washington weakening the economy through its series of fiscal crises and its inability to put the government on a sound fiscal path.
Dr. Nayantara Hensel, Chair of the National Association of Business Economists (NABE) Outlook Survey Committee and Professor of Industry and Business at National Defense University said:
Over 95% of the panelists believe that growth in real GDP in 2013 is likely to be negatively affected by uncertainty surrounding the US fiscal imbalances and issues linked to the continuing resolution, sequestration, and the debt ceiling.
Most don’t expect a last-minute deal to avoid sequestration, automatic spending cuts. Sixty percent of the panelists expect the cuts to take effect either partially or in total on March 1.
I’m sure a few of the economists surveyed are familiar with research showing that countries with high levels of government debt have slower economic growth. This survey is another signal to Congress and the administration that avoiding spending reforms—especially unsustainable entitlements--can have negative ramifications to the economy.