Budget cuts would harm US economy

If the Democrats and Republicans fails to agree on a joint plan by Thursday, the US will automatically be subject to 85 billion dollars in spending cuts for this year as of March 1. That would be a dangerous situation, the left-liberal monthly Prospect writes: "When airport delays become endemic, when pre-school education programmes are eliminated and when the economy slows unnecessarily, it might remind Americans that government does in fact have a purpose. The saddest thing is that this episode is utterly unnecessary. The budget deficit is already declining both nominally and as a share of GDP. These days just about everybody but George Osborne and the Bundesbank recognises that cutting government spending during a recession is a prescription for pain. Austerity has been tried and it has failed. ... If the Republicans don't make a deal soon, Obama will have a magnificent opportunity to show voters that cutting government isn't a panacea. Sometimes it is a mistake."

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