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The paper finds a large negative effect of spending cuts under such circumstances, a much smaller effect of tax hikes.
Chris Simpkins, director general of the RBL, fears the effect of spending cuts on general benefits and housing entitlements, as well as on service budgets.
"With growth minimal, real wages falling, consumer confidence collapsing and the full effect of spending cuts just beginning to hit the economy, the STUC sees no prospect of sustainable improvement in the Scottish labour market.
In particular, the whole case for fiscal stimulus and against austerity rests on the proposition that with interest rates up against the zero lower bound, the central bank can neither achieve full employment on its own nor offset the contractionary effect of spending cuts or tax hikes.
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So the Fed can't blunt the job-destroying effects of spending cuts, which would hit with full force.
The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in "confidence," that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates.
On Monday, Ms. Napolitano told reporters that while passengers at New York's airports had not yet felt the effects of spending cuts that went into effect on Friday, security lines at airports in other cities, including Los Angeles and Chicago, were already more than twice as long as they had been before.
The government has put into effect the bulk of spending cuts and tax increases last month that were part of its plan to reduce most of the budget deficit by 2015.
He promises a white paper in the spring, and legislation "at the earliest opportunity"—though any reform is unlikely to take effect until after the current round of spending cuts ends in 2015.Attempts to rethink the care of the elderly and needy have in the past been blighted by political wrangling.
He will be tested when a raft of spending cuts take effect - such as withdrawing child benefit from high earners and capping the total amount people can claim in benefits.
A variety of spending cuts and tax increases take effect shortly after the debt ceiling is expected to be reached, potentially setting up a battle worse than last summer.
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