- Jul 29, 2001
A confidential new report prepared by Goldman Sachs for its clients says spending cuts passed by the House of Representatives last week would be a drag on the economy, cutting economic growth by about two percent of GDP.
“Under the House passed spending bill [which cut spending by $61 billion],” says the report, which was obtained by ABC News, “the drag on GDP growth from federal fiscal policy would increase by 1.5pp to 2pp in Q2 and Q3 compared with current law.”
You gotta read between the lines here but what Zebo has been saying for years is we are in a debt death spiral Goldman recognizes too. Cut deficit, plunge economy into disaster. Debt is the only thing keeping us from recognizing a full-on economic depression we are in. How bad? Just extrapolate what Goldman says by taking away $1.7 trillion deficit would result in a decrease of 28x Goldman's estimate, or 50% of GDP would disappear.
Now you know why republicans are RINOs always despite rhetoric.
Worse, there's no way out - If you raise taxes to cover deficit you subtract directly from private spending by same levels plunging us into same 50% reduction in GDP. Refuse to raise taxes and you are forced to continue to borrow.