According to a report from the World Bank, House Republicans are not only threatening the United States economy with their insistence on spending cuts and continued monkeying around with the debt ceiling. The global economy is also at risk:
In an alternative scenario the bank labeled “fiscal paralysis,” the U.S. implements large, across-the-board government spending cuts scheduled to begin in March and Congress provides only a short-term increase in the debt ceiling. That would cause the U.S. economy to shrink by 0.4%, knocking Europe into a deeper contraction and reducing global growth by 1.4 percentage point.
The economic drag from deal that averted the so-called “fiscal cliff” will already hinder growth this year. More spending cuts and the looming possibility of the U.S. defaulting on its obligations would only make the matter worse. As Rep. Jerry Nadler (D-NY) explained, “trying to reduce the deficit right now is wrong, because this position is going to keep the economy in the doldrums and keep the depression going longer and it’s self-defeating.”