April 7, 2011
The US is going down a similar road as that taken by Greece and Portugal with regard to its budget decisions, John E. Silvia, chief economist at Wells Fargo, said on Wednesday.
“To me—being in Europe for a few days—the plot in Greece and Portugal sounds an awful lot like the same plot that’s going on in the United States. But the characters have different names,” he said.
As the deadline for a budget agreement looms in Congress, Silvia told CNBC that the US must recognize that the moderate economic growth forecast by most economists for the country will fail to generate the tax revenue necessary to fund long-running government entitlement spending.
“We have to make some arrangements in terms of cutting back the promises that were made by prior politicians for these entitlements,” Silvia said.
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