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Are government spending cuts slowing the recovery?
The private sector is growing faster than the broader economy, and some analysts blame government budget cuts for stalling a more robust economic comeback
Rep. Paul Ryan (R-Wis.) and fellow Congressional Republicans are pushing for even deeper government spending cuts.
Rep. Paul Ryan (R-Wis.) and fellow Congressional Republicans are pushing for even deeper government spending cuts.
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ast week, the government reported that gross domestic product (GDP) — the broadest gauge of American economic activity — grew at a tepid pace of 2.2 percent in the first quarter. While the data seems to confirm that the recovery is trudging along, its progress is too sluggish to make a significant dent in the unemployment rate. So what's holding the economy back? The Obama administration says the private-sector economy actually grew at a rate of 3.5 percent, and argued that government budget cuts — largely in the form of reduced spending — are hampering the overall recovery. Are spending cuts to blame for weak growth?

Yes. The data makes that abundantly clear: The GDP report shows that "continuing reductions in government spending dampened overall growth," says McClatchy Newspapers. Federal spending dropped 5.6 percent; military spending fell 8.1 percent; and spending by state and local governments dipped 1.2 percent. These drops lead directly to layoffs and offset the "rays of hope" shining from the private sector. That is one reason why there is a "divide between businesses, which appear to be thriving, and workers," who continue to struggle.
"Government cuts slow economic recovery"

No. Obama tried spending and it didn't work: President Obama went on a "spending blitz" when he first came into office, but "we never got the roaring recovery" he promised, says The Wall Street Journal in an editorial. The government is hardly cutting back on spending in any serious way: In fact, the federal debt has only climbed since the recession began. The "big picture" is that the spending-driven recovery Obama is advocating has "less staying power" than one fueled by tax cuts and deregulation. It's time to try something different.
"The growth deficit"

Congress should hold back on further cuts: The economy is clearly "too fragile to withstand the kinds of budget cuts Congressional Republicans are proposing," says The New York Times in an editorial. Cutbacks are already "scheduled to deepen next year in keeping with last year's federal budget deals," and further cuts "will eat into growth." Just look at Europe: Severe spending cuts there have only led to a "self-destructive" cycle of recessions. What America needs is "concerted action to support the economy."
"The economy downshifts"

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