Press Esc to close
Monday 20 April 2015
News updated at 2:25 AM IST
Weather
Max: 33.4°C
Min : 21.6°C
In Bengaluru
Sunny day

Spending cuts to hit US economy, weaken global economy: Obama

Washington, Feb 28, 2013 (PTI)

US President Barack Obama has cautioned that the looming automatic spending cuts or sequestration beginning March 1 will badly hit the country's economy and weaken the global economy.

"This is going to be a big hit on the economy," Obama said in his address to the Business Council on Wednesday night ahead of the so called sequester that will trigger a USD 85 billion in spending cuts.

"Both private sector as well as public sector economists are estimating that we could lose as much as six-tenths of a point, maybe a little bit more, of economic growth.

"And that means, inevitably, hundreds of thousands of people who are not going to get jobs that otherwise would get them," Obama said.

"It means that you have fewer customers with money in their pockets ready to buy your goods and services. It means that the global economy will be weaker, because although we obviously still have a long way to go in recovery, we're actually doing significantly better than some of the other developed nations," he said.

"The worst part of it is it's entirely unnecessary. It's not what we should be doing," he added.

"If you look right now at what our economy needs, taking USD 85 billion out of it over the next six months -- indiscriminately, arbitrarily, without a strategy behind it -- that's not a smart thing to do if we're serious about making sure that America grows and that our middle class is thriving and there are ladders of opportunity into the middle class," he said.

Obama said for the last several months he has been calling for a balanced approach to deficit reduction that combines some tough spending cuts, and a tax reform agenda that without raising tax rates further could in fact raise sufficient revenues that combined would yield about USD 1.5 trillion in deficit reduction over the next decade.

According to the US President, the good news is that after four years of difficult times, there is steady recovery in the US economy, if not as robust as one would like.

"We've seen over six million jobs created over the last 35 months. Housing is finally beginning to recover. There is reason for optimism as we move forward," he said.

"I think what everybody here is aware of, though, is that we've got a long way to go. Unemployment is still too high. Middle-class families are still feeling enormous stresses and strains.

"What I think everybody is concerned about is the enormous uncertainty in terms of the political framework, the tax framework, the debt framework within which all of you are going to be operating over the next several years," Obama said.


Go to Top

Photo Gallery
Narendra Modi talking with BJP veteran LK Advani during 'Garib Kalyan Yojana',...

Narendra Modi talking with BJP veteran LK Advani during 'Garib Kalyan Yojana',...

A view of the Kedarnath Shrine before it reopens on April 24 for general public...

A view of the Kedarnath Shrine before it reopens on April 24 for general public...

Snowed down surroundings of Kedarnath Shrine before it reopens on April 24 for general public...

Snowed down surroundings of Kedarnath Shrine before it reopens on April 24 for general public...

Sania Mirza (C) with Prarthana G. Thombare (3rd from R) and other team members...

Sania Mirza (C) with Prarthana G. Thombare (3rd from R) and other team members...

VK Singh interacts with people rescued as part of Operation Raahat...

VK Singh interacts with people rescued as part of Operation Raahat...

Rahul Gandhi helps  Kiran Chaudhary off the stage after she stumbled and hurt herself...

Rahul Gandhi helps Kiran Chaudhary off the stage after she stumbled and hurt herself...

Sonia Gandhi talks to Rahul Gandhi on stage during the farmers rally...

Sonia Gandhi talks to Rahul Gandhi on stage during the farmers rally...

RJD chief Lalu Prasad during Prajapati Rajnitik Chetna Rally at Gandhi maidan in Patna...

RJD chief Lalu Prasad during Prajapati Rajnitik Chetna Rally at Gandhi maidan in Patna...

Bollywood actor Madhuri Dixit at the Colors Leadership Awards 2015...

Bollywood actor Madhuri Dixit at the Colors Leadership Awards 2015...

Young Buddhist Monks offer special prayers at the Mahabodhi Temple in Bodhgaya...

Young Buddhist Monks offer special prayers at the Mahabodhi Temple in Bodhgaya...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523