CBO: Turns Out Austerity Is Bad For the Economy

February 6, 2013 | MSNBC |

A new report from the non-partisan Congressional Budget Office adds to the mounting evidence that spending cuts have held back America’s economic recovery. According to the CBO’s budget and economic projections for the next decade, released on Tuesday, middling GDP growth over the past year is partially attributable to “scheduled automatic reductions in federal spending.”

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While few would say that the CBO’s estimates are positive, not everyone believes that GDP is the best measure of an economy’s health. Right around when the 0.1% GDP drop was first reported, the progressive think tank Demos published an essay arguing that GDP measurements omit “the distribution of growth and, as a result, cannot reflect inequality.”