Deep Spending Cuts Pose A New Threat To US Economy [VIDEO]

Analysts say they're concerned but not panicked about the possible effects on the economy of automatic cuts if the deficit supercommittee fails to agree.

David Kelly of JP Morgan Funds says "there's no doomsday scenario in reducing government spending."

But failure of the committee or a decision by Congress to let emergency unemployment aid and a Social Security tax cut expire at year's end could spook markets just the same.

   Courtesy Associated Press

Many analysts say the economy and markets can withstand the blows. That's because Congress or the Federal Reserve could take other steps next year to lift the economy.

And investors expect so little from the congressional panel that they're unlikely to overreact whatever it does.

(Copyright 2011 by The Associated Press.  All Rights Reserved.)