This week they issued a report on what would happen if the House budget bill, cutting $62 billion in federal spending, was actually passed. Their prediction: GDP growth will be reduced by 1.5 to 2 percentage points later this year.
For some perspective on what that means, the Federal Reserve is predicting that under current budget assumptions, GDP growth in 2011 will be 3.4% to 3.9%, so we're talking cutting that in half. And that same report from the Feds predicted an unemployment rate of 8.8% to 9% under current policies. So if GDP is cut in half, unemployment will likely soar above 10%.
Its no wonder then, that Sen. Chuck Schumer has this to say about what the Republican budget proposal would do to the economy:
"House Republicans’ proposal is a recipe for a double-dip recession," Schumer said Wednesday in a statement. "Just as the economy is beginning to pick up a little steam, the Republican budget would snuff out any chance of recovery."
Its probably impossible to tell whether Republicans really believe that cutting 1 million jobs (what their budget proposal is projected to do) would actually help the economy or if they're simply willing to risk a double-dip recession on a gamble that a weak economy hurts Obama and the Democrats. I personally don't care whether they're wrong or willfully destructive...this economy can't handle their games.