Goldmans chief: Austerity wrong medicine for US

Goldman Sachs chief executive Lloyd Blankfein has launched a scathing attack on the US government's austerity program, arguing growth will derail significantly once the Bush-era tax cuts expire in January.

Blankfein said with the prospect of a fiscal cliff hanging over the US economy, which economists forecast could wipe around 3% off GDP, now is not the right time for the US to be carrying out austerity measures. The Daily Telegraph reports that during a talk at the Canadian Club of Toronto Blankfein argued severe cutbacks are not a good 'medicine' for US GDP growth. "You cannot austere yourself into a higher GDP, and it is not going to be very good if the medicine kills the patient," he said. "I am all for implementing budget changes that accelerate over the long term, but in the s...