US reveals plans to reduce budget deficit

| February 14, 2011 | 0 Comments
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US President Barack Obama has today unveiled his budget for 2012, aimed at reducing the country’s spiralling deficit.

The measures come as many major economies embark on massive spending cuts to trim their deficits.

However, like many other economies, tough measures introduced to trim the budget deficit could hamper economic growth and slow the economic recovery.

Meanwhile, the US is aiming to shave $1.1 trillion (£690 billion) from the deficit over a 10-year period.

The tough austerity measures will see spending cuts and tax hikes and will help trim the deficit by a third in one year.

In addition, there will be a five-year overall freeze in domestic non-defence spending, cutting that spending as a share of the economy to the lowest level in more than 60 years, according to the President.

“If we’re going to walk the walk when it comes to fiscal discipline, these kinds of cuts will be necessary,” he said.

However, the proposals met with criticism from the Republicans who do not believe the cuts will go far enough in reducing the deficit.

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