Boston University’s Kotlikoff: We’re Suffering from ‘Hysterical Economy’

Thursday, 13 Dec 2012 07:54 AM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
The widespread panic over the fiscal cliff has given us a “hysterical economy,” says Boston University economist Laurence Kotlikoff.

“You’re an employer. Every day you hear ‘the economy’s going over a fiscal cliff. Tax hikes and spending cuts will kill the economy,’” he writes on Forbes.com.

That fear makes companies start firing their workers. Other firms see less demand as a result, and they start doing the same thing, Kotlikoff says.

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.

This collective freak-out then creates the hysterical economy.

The government would do well to address our budget problems, Kotlikoff says.

A key issue is the $222 trillion fiscal gap between projected future government spending and tax revenue.

“[I]f we want to panic, there is something real to panic about,” he writes. “It’s the fiscal abyss, not the fiscal cliff.”

It would be better if Washington stopped scaring the public about the cliff and instead provided real leadership on the budget issue, Kotlikoff says.

Average Americans too are critical of the government’s approach to the cliff.

"Somebody's gotta have some smarts," 63-year-old New Hampshire business owner John Pfeifle told The Associated Press. He’s displeased that both President Barack Obama and House Republicans appear to be willing to jump off the cliff.

"I have no faith at all they'll do the right thing," he said of Congress.

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Treasury Note Auction Wins Most Foreign Demand in a Decade

Tuesday, 25 Nov 2014 17:12 PM

Treasury five-year notes gained for a fourth day, the longest rally since August, as a $35 billion auction of the securi . . .

Stocks Fall as Slumping Oil Prices Push Energy Industry Lower

Tuesday, 25 Nov 2014 16:57 PM

A slump in energy prices pushed the stock market back from record levels on Tuesday. Energy stocks slid as the price of  . . .

HSBC, Goldman Rigged Metals’ Prices for Years, Suit Claims

Tuesday, 25 Nov 2014 16:51 PM

Goldman Sachs Group and HSBC Holdings were sued in New York over claims they conspired for eight years with two other co . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved