Deficit cut would trim growth: BlackRock's Fink

Reuters

CHICAGO (Reuters) - Economic growth could be trimmed by 1 percentage point a year for the next decade if plans to reduce the deficit by $4 trillion are enacted, BlackRock <BLK.N> Chief Executive Officer Laurence Fink said.

With analysts already predicting modest growth of 2 percent to 3 percent annually, that would leave the country with an economy expanding at only about 1 percent a year, Fink said at the Morningstar investment conference on Friday.

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He recommended raising tax rates on dividends so they are above those for capital gains and altering mark-to-market accounting standards that do not apply equally to corporate assets and liabilities.

Without significant deficit reduction, the United States budget is at great risk from even a small rise in interest rates, which could send debt service costs skyrocketing, Fink said.

(Reporting by Aaron Pressman; Editing by Lisa Von Ahn)