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Global Cutting Spending Countries
Latino Small Business Loans - Spending cuts. At last week's G-20 summit, countries from around the world pledged to cut their deficits over time. Everyone agrees that it's a noble goal, but experts are torn over when it's appropriate to begin cutting spending. Many countries in Europe, most notably Greece and Spain, have already begun instituting austerity programs (through a combination of spending cuts and tax hikes) because of their enormous budget deficits. Here in the United States, deficit hawks voted down a bill last week that would have extended unemployment benefits and offered some aid to state and local governments. Politicians in developed nations are caught choosing between cutting spending now to begin to chip away at their massive deficits and risk stunting growth, or authorizing further stimulus to pump life back into the fragile global recovery. "The question is how long is it appropriate for the authorities to hold off before engaging," says Brian Gendreau, market strategist for Financial Network. "It's a danger of getting what you wish for." It's estimated that over the next year, spending cuts throughout the developed world will chop a full percentage point off of GDP growth, according to Gendreau. That's a big number given that many European countries are projected to grow at a very slow rate.
Abogados July 6, 2010 11:26 AM