U.S. fiscal war could prove self-defeating

Signs are emerging that the ongoing budgetary tug of war between Obama and the Republicans will be protracted, the economic cost of which could be punishing in proportion. Last month’s fiscal cliff deal caused a budgetary contraction of about 1.5% of U.S. gross domestic product, most of which was due to the decision to let […]

By Staff | January 28, 2013 | Last updated on January 28, 2013

1 min read

Signs are emerging that the ongoing budgetary tug of war between Obama and the Republicans will be protracted, the economic cost of which could be punishing in proportion.

Last month’s fiscal cliff deal caused a budgetary contraction of about 1.5% of U.S. gross domestic product, most of which was due to the decision to let payroll taxes expire, says a report in the Financial Times.

U.S. economic growth for the year is further expected to shirk due to the likelihood of another deal to cut spending and raise revenues at the next fiscal cliff on March 1.

Additionally, the fiscal battle will take up time Obama wants to spend on other important issues such as global warming, immigration reform and gun control.