Economist says Budget Repair Bill could bring on another recession

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Economists are warning of the economic repercussions on the Chippewa Valley if Governor Walker's bill is passed.

We spoke with a UW-Eau Claire professor of economics who painted a very grim picture of the Chippewa Valley and the state if Walker's Budget Repair Bill is passed.

“I am predicting that we fall back into recession again,” economics professor Fred Kolb tells us.

Kolb says Walker's Budget Repair Bill is too much too soon for our already shaky economy.

“Spread out over a 5-7 year period I think that the country would be better off, having it all happen right away, I think it's going to be a disaster for the economy,” he tells us.

And local businesses in Eau Claire are also starting to get worried about the impact on them if the bill is passed.

“It impacts all of us, whether you are poor, middle class or wealthy everybody spends money on food and my personal fear is that Walker's supposed repair bill is going to create a deflationary cycle,” Just Local Foods worker Nik Novak tells us.

Novak says with so many public workers facing considerably smaller paychecks, there will be a lot less spending in the Chippewa Valley.

“If people are pinched monetarily they are going to go someplace where they can buy in bulk, where they can buy cheaply during the transition,” Novak explains.

And that means less money coming into small local businesses. But, Republican Senator Terry Moulton tells us the alternative to Walker’s bill, laying people off could be even worse for state workers.

“Certainly I would say this is going to have an economic impact that won't be good, but the alternative may be even worse. If it's true we have 6,200 state workers in Eau Claire County and we had to lay off 10 percent of them, that would have an even more detrimental impact on the economy,” Moulton says.

Moulton adds he's looking at the greater good and he says this bill will help everyone, in the long term.

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