Even Goldman "Vampire Squid" Sachs Is Against the GOP Budget

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    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.

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    Feb 26, 2011 7:45 AM GMT
    I suspect Wall Street is a little on edge about the prospect of a long term (a month or more if both sides prove to be irreconcilable) federal shutdown.

    It could put a crimp on federally funded projects involving a lot of cash flow to the private sector.

    Both sides should compromise and meet somewhere in the middle; childish stubbornness is going to cost both sides some political capital.

    Not sure how this is going to wash for the Tea Partiers, as it seems like the Dems hold the whip hand and can paint the TP/GOP as obstructionists.

    My best guess is that the GOP House concedes as much as they need for the stopgap needed to get us through the current FY, and shortly after things are stabilized then they can pass a measure of some sort to defund the pieces that are disagreeable.
  • GQjock

    Posts: 11649

    Feb 26, 2011 11:58 AM GMT
    Hard to tell a lie when the truth is staring right in your face