Georgia U.S. Sen. Johnny Isakson warned Monday the looming fiscal cliff in the federal budget could be disastrous for Georgia.
Isakson said it would devastate military contractors and communities around Georgia military bases that depend on those companies. But he said massive cuts in federal spending would do damage throughout the economy.
“If you go off this cliff, the capital that’s sitting in the bank by American entrepreneurs will stay in the bank, won’t be invested, there’ll be a decline in jobs, and you’ll have a second dip in the recession,” Isakson said at an event announcing a grant to help homeless veterans in north Georgia. “In fact, there are estimates that if we go off the cliff, GDP – which is only at about 1.2 percent in the last quarter – will go to a negative 4 or 5 percent.”
Isakson said once that happens, recovery becomes increasingly difficult.
He said any deal will be difficult and messy, but he said there is common ground to be found between Democrats and Republicans.