Economists: Sequester Is Near Certainty, Will Hinder GDP Growth
It’s going to be quite a storm! This Friday, March 1, the country will see the deadline expire on a federal government sequester, which will tentatively trim $85 billion from the federal budget for the next fiscal year.
The Los Angeles Times reports that the 49 economists surveyed by the National Association for Business Economics do not anticipate a recession scenario, similar to the one predicted had the “Fiscal Cliff” earlier this year been fully realized.
But despite less apprehension about the economy reverting back to negative growth, over half the economists polled think that the results of the sequester could hinder GDP growth by about half a percentage point, which is fairly significant given the GDP’s average growth rate has been on the lower end at about two percent.
Total government spending is set to decrease by one percentage point from last year, which the association says is a downward turn from the 0.6 percent that was polled in December, according to the median of the responses from the economists surveyed…