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Economist: Government needs to rein in spending

By   /   Friday, October 9th, 2009  /   Comments Off on Economist: Government needs to rein in spending

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Budget deficits by the U.S. government pose the greatest risk to the stock market, the dollar and the economy, a prominent economist said Oct. 9.

Speaking at California State University, Channel Islands, Sung Won Sohn, the Martin V. Smith professor of economics at the school and a former chief economist for Wells Fargo, said the federal government will have to rein in spending in order for the economy to recover. “Were are borrowing $300 billion a day, 365 days a year,” Sohn said. “A lot is at stake.”

Speaking near the anniversary of the global financial meltdown, Sohn said the U.S. economy and the stock market have come a long way toward a recovery. He said Ventura County has faired worse than the national economy in areas such as real estate and overall unemployment but has done somewhat better in agriculture.

Sohn said problems with California’s budget also suggest an era in which spending has gotten out of control. “There’s no light at the end of the tunnel” for California’s budget woes, he said. “The state will simply have to struggle” through and accept budget cuts until things start to turn around.

In a sign of just how deeply the cuts are affecting the area economy, CSUCI President Richard Rush was not available to introduce Sohn to the 125 people at Sohn’s speech because the president was on a furlough day.

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