This has been pointed out so many times, by so many economists that it feels useless to point it out again. But with Republicans in Congress pushing for billions of dollars in immediate spending cuts, and with Barack Obama cravenly and mindlessly buying into the canard that the deficit is the biggest threat to the U.S. economy right now, it bears repeating:
Some House Republicans backed by tea party groups demand even deeper front-end cuts, perhaps as much as $100 billion, arguing that politicians can’t be trusted to keep their promises further out.
That’d be dangerous, warned Mark Zandi, chief economist for forecaster Moody’s Analytics.
“I think the idea is a very serious policy error,” he said. “This would be the fodder for another recession. The economy may be able to digest $25-30 billion more (in federal spending cuts) … but $100 billion, I don’t think it could digest that.”
Zandi, who’s frequently cited by Republicans and Democrats alike, favors spending cuts “when the economy is off and running,” but he cautions that “to add more fiscal restraint in the latter part of 2011 and 2012 would be a mistake.”