Tags: Soros | US | double | Dip | recession

Soros: US Has Already Double-Dipped Back Into Recession

Thursday, 22 Sep 2011 07:36 AM

The U.S. economy has already dipped back into recession, and Republicans deserves a good chunk of the blame, says billionaire investor George Soros.

"I think we are in it already," Soros tells CNBC when asked if the country was at risk for falling back into a recession.

He also took at shot at Republicans, blaming their opposition to President Barack Obama's jobs and tax policies for steering the economy away from recovery and pushing it back over the edge and into economic contraction.
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"We have a slowdown and basically a conflict about whether the rich ought to pay taxes to create jobs or not and there was a deal in the making which would have balanced the budget over the long term, but would have allowed short-term fiscal stimulus, which would have been the right policy," Soros says.

"That was rejected, it fell apart … so it will come to the electorate next year to decide what they want."

Focusing on Europe, Soros says the debt crisis there is threatening the global economy worse than the Lehman Brothers collapse in 2008, although he adds that authorities will work it out.

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George Soros
(Getty Images photo)
"It is a more dangerous situation [than Lehman Brothers] and I think that the authorities, when push comes to shove, will do whatever it takes to hold the system together, because the alternative is just too terrible to contemplate," Soros says.

European officials are working to prevent Greece from defaulting, which could threaten the stability of the European financial system and send shockwaves to the U.S. and elsewhere.

An orderly default, however, wouldn't be a bad thing, Soros says.

"I think that you could have two or three of the small countries default or leave the euro provided it is prepared and done in an orderly way," Soros says.

"If it were to happen unprepared it could actually disrupt the global financial system, but that's why it's important to allow for it to happen and then those countries have a genuine choice it doesn't mean they are being pushed out."

Greece is pushing through austerity measures to comply with terms of aid packages, including agreements to cut some pensions, trim public-sector payrolls and expand tax revenues.

Greek officials say the country is sticking with the euro.

"Greece is and will forever be a member of the eurozone," Finance Minister Evangelos Venizelos tells parliament, according to the AFP newswire.

"We will do anything, we will not place at risk the fate of the country and its place in the eurozone."

Still, worries persist that banks across Europe remain exposed to Greece, and calls are rising that financial institutions need cushion themselves should Greece and other countries default.

Still, public support may be there for those who need it, should the crisis get worse.

"The days are behind us when the banks can be bailed out with taxpayer funds," EU internal market commission Michel Barnier tells France le Figaro newspaper, as reported by Reuters.

"But it cannot be ruled out that some banks will need state help. The European Commission is prepared for such a scenario and will oversee it."

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The U.S. economy has already dipped back into recession, and Republicans deserves a good chunk of the blame, says billionaire investor George Soros. I think we are in it already, Soros tells CNBC when asked if the country was at risk for falling back into a...
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