Press Esc to close

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

Washington, Feb 28, 2013 (PTI) 10:16 IST
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

More from this section
Photo Gallery
Bangalore ATP Challenger

Bangalore ATP Challenger

Rebel AAP MLA Kapil Misra and BJP MLA Manjinder Singh Sirsa after putting anti-pollution masks on...

Rebel AAP MLA Kapil Misra and BJP MLA Manjinder Singh Sirsa after putting anti-pollution masks on...

IAF planes display an air show during presentation of standards to the 117 Helicopter Unit and 223..

IAF planes display an air show during presentation of standards to the 117 Helicopter Unit and 223..

Forest employees and locals capture a leopard in a cage after it strayed in a village of Udhampur..

Forest employees and locals capture a leopard in a cage after it strayed in a village of Udhampur..

Activists of the Kisan Mukti Sansad hanging dummy bodies of farmers from a flyover during a...

Activists of the Kisan Mukti Sansad hanging dummy bodies of farmers from a flyover during a...

Indian Air Force personnel perform during presentation of standards to the 117 Helicopter Unit...

Indian Air Force personnel perform during presentation of standards to the 117 Helicopter Unit...

A snow cutter machine clears the road after heavy snowfall at Peer Ki Gali in Poonch...

A snow cutter machine clears the road after heavy snowfall at Peer Ki Gali in Poonch...

Students having a view of robots displayed at a stall at

Students having a view of robots displayed at a stall at "20th Bangalore Tech Summit" in Bengaluru..

Russian artists perform a play in Gurugram on Thursday.

Russian artists perform a play in Gurugram on Thursday.

Foreign athletes pose for a group photo during a press conference ahead of the Delhi Half Marathon.

Foreign athletes pose for a group photo during a press conference ahead of the Delhi Half Marathon.

Like us on Facebook

Copyright 2017, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523
Powered by Yodasoft Technologies Pvt. Ltd.