Super Wealthy CEO Admits Spending Cuts Will Hurt The Economy, Wants Them To Happen Anyway

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"Super Wealthy CEO Admits Spending Cuts Will Hurt The Economy, Wants Them To Happen Anyway"

Honeywell CEO David Cote

For a hint of what austerity can do to an economy, one needs to look no further than Europe. And the U.S. is in for a dose of austerity of its own due to spending cuts under the so-called “sequester” that are scheduled to take place in March.

Honeywell CEO David Cote — who is part of an organization called Fix the Debt that is pushing for steep cuts in social spending as part of a “grand bargain” on the budget — acknowledged in an interview that the sequester’s spending cuts will harm the economy. But he thinks they need to happen anyway:

“While there could be some economic impact, to me it looks like $100 billion on a $3.5 trillion government spend,” Cote told reporters after addressing the Boston College Chief Executives’ Club.

“So, yeah, there’s some impact but at some point we have to start working to get our debt under control and if this is the only rational step they could seem to take to do it, then they ought to do it.”

Cote is one of the highest-paid CEOs in the country, making $37 million in 2011. Honeywell, meanwhile, paid just a 2 percent tax rate between 2008 and 2011, according to Citizens for Tax Justice, while receiving $1.7 billion in tax subsidies. Cote himself has said that the corporate tax rate should be zero.

The latest projections from the Congressional Budget Office show that the deficit has been reduced substantially over the last two years, the debt is stabilizing, but unemployment and slow economic growth remain huge problems. The sequester, according to the Bipartisan Policy Center, will cause the loss of more than one million jobs.

As the New York Times editorialized, the sequester is “a mindless government austerity program,” saying “With the economy teetering on a knife edge, it is clear that this is the worst moment to initiate an indiscriminate budget cut.” Indiscriminately slashing government spending may help achieve the goals of Fix the Debt and some rich CEOs, but it won’t help the economy at all.

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