Obama signs to make $85 bn cuts

Despite his opposition to it, US President Barack Obama signed an executive order to begin $ 85 billion in spending cuts, which he said could see growth cut by over one-half of one per cent and cost about 750,000 jobs.

Obama singed the order on Friday night reluctantly after he and the Congressional leadership – those from the Republican party – failed to arrive at a consensus on budgetary cuts and how to address the issue of deficit.

The sequester is “dumb” but is “not going to be an apocalypse,” Obama said after his nearly hour long meeting with the Congressional leaders.

“At a time when our businesses have finally begun to get some traction — hiring new workers, bringing jobs back to America — we shouldn’t be making a series of dumb, arbitrary cuts to things that businesses depend on and workers depend on, like education, and research, and infrastructure and defence. “..It’s unnecessary. And at a time when too many Americans are still looking for work, it’s inexcusable,” Obama said.
All of this will cause a ripple effect throughout the economy, he said adding that layoffs and pay cuts means that people have less money in their pockets, and that means that they have less money to spend at local businesses.

“That means lower profits. That means fewer hires. The longer these cuts remain in place, the greater the damage to our economy — a slow grind that will intensify with each passing day,” he said. He said economists extimated that this sequester could result in growth cut by over one-half of 1 per cent.