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Warren Buffett, billionaire investor, isn’t the biggest fan of the automatic federal cuts to the budget that started last Friday. He did say they should not hurt the American economy at all, and that they will certainly help reduce the US deficit.

As of now, the US is currently running a deficit of around 6% of entire economic output. This amounts to creating a form of stimulus for the economic recovery by having $85 billion worth of less spending during the calendar year 2013.

“I think that’s still giving the economy quite a juice,” said Buffett (CEO of Berkshire Hathaway Inc.) to CNBC this past Monday.

President Barack Obama warned Americans of the overall economic impact of the supposed sequestration. Currently, the nonpartisan Congressional Budget Office tells us will slow US growth by 0.6 percentage points during 2013, and reduce jobs by 750,000.

Buffett is in agreement with both Republicans and Democrats in Washington when he describes the wide-ranging process of cutting the budget as a “meat ax” way to help reduce the national deficit.

“It’s a very dumb way of attacking a very serious problem,” said Buffett, in which he notes that automatic spending cuts do not slow the issues of the growth in Medicare, which are the main issue with long-term future deficits.

Buffett also said that the increase in taxes on January 1 were a meat ax approach as well, since the expiration of the payroll tax break of 2% (that was only temporary) affected workers in a wide range.

“We’re going to bring down spending and we’re going to bring up revenues and we may get there in fits and starts and everybody may scream each time we do it. But the deficit is going to come down,” said Buffett.

“We may be doing it in a meat ax way in this particular move,” he said. “We did it in kind of a meat ax way in terms of the revenues going up at the start of the year.”

Approaching deficit spending this way is most likely better than not doing anything at all, said Buffett. But he hopes that the politicians in Washington can come up with a way to improve upon it, and in the end come up with a broader deal.

“You may have to use the meat ax first and then people kind of look at their handiwork and say we have to do better than this,” said Buffett.

Are you nervous about the fiscal cliff? Everybody’s favorite billionaire Warren Buffett isn’t worried at all.

Even though we have reports from the Congressional Budget Office showing that the fiscal cliff – over $600 billion in automatic tax increases, plus cuts in spending that begin on January 1, 2013 – is bound to send the US right into another recession with a much larger increase in unemployment, Warren Buffett has a different opinion on the matter.

Here’s a quote from a Warren Buffett interview with CNN:

“if we go past January 1st, I don’t know if it will be January 10th, or February 1st, but were not going to permanently cripple ourselves because 535 people can get along.

Also, Mister Buffett feels that President Obama is justified in going after $1.6 trillion in revenue.

“We need $1.6 trillion. We need to get our revenue up to about 19% of GDP, and we need to get our expenses down to 21% or 21.5% of GDP. Everyone knows that. So it’s going to take significant action on both sides. And $1.6 trillion happens to be one percent of GDP, we’ll need that much revenue, and we’ll need to cut expenditures significantly too.”

Warren Buffett also points out that the Congressional divide is the main reason why we are experiencing setbacks. The Republican led house specifically needs to begin to cooperate.

Warren Buffett says:

“It really depends very much on the Republicans in Congress. It doesn’t take the whole group in Congress to avoid that. I mean if 25 Republicans decide that they’ll put country above party and sign up for something that makes sense then we don’t need to go over the fiscal cliff.”

He also believes that the economy is going to stay strong regardless of what happens:

“We had Hurricane Sandy which disrupted the economy for a period, we had Katrina many years ago, we have things that will disrupt the economy, I mean 9/11 was an extraordinary case but we have a very resilient economy. We’ve had one for hundreds of years and the fact that they can’t get along for a month of January is not something that’s going to torpedo the economy.”

So there you go. Will history prevail, and prove Warren Buffett right once again? Only time will tell.