Feb 26, 2011 6:11 AM GMT
You know things are bad with Goldman is throwing the Republicans under the bus.
Goldman SachsThe GOP spending cuts have been criticized again.
A Goldman Sachs economist has warned that the $60 billion package of spending cuts proposed by the Republicans to counter President Obama's proposal could slow economic growth.
And if budget wrangling between the Obama administration and the Republican-dominated House of Representatives led to a shutdown? That, according to Goldman, could cost $8 billion a week, the Financial Times reported.
Goldman's warning follows Treasury secretary Timothy Geithner's recent claims that the Republican plan would cost jobs.
In the confidential report, obtained by ABC News, among other news outlets, Goldman Sachs economic forecaster Alec Phillips said the GOP plan could slow economic growth by up to 2 percent. Even a compromise deal, with $25 billion in cuts could slow growth by 1 percent.
In its latest spending plan, the White House predicted GDP growth of 2.7 percent this year.
Goldman's analysis contradicts the GOP's "cut-and-grow' fantasy," Chuck Schumer, (D-NY) told Reuters. "This nonpartisan study proves that the House Republicans' proposal is a recipe for a double-dip recession," Schumer added.