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US Billionaire Says Economy Headed Downhill

Billionaire Warren Buffett is confident America's best days are still ahead, but he says "fear and confusion" have driven the U.S. economy "off a cliff." He said Capitol Hill lawmakers are partly to blame for inciting fear. He urged U.S. leaders to stop the partisan bickering and focus on finding solutions.

Warren Buffett, one of the world's richest men, summed up the economy this way on CNBC.

"It's fallen off a cliff, and not only has the economy slowed down a lot, people have really changed their behavior like nothing I've ever seen," he said.

In a wide-ranging interview Monday on the cable network, Buffett predicted higher unemployment and inflation in 2009, because of the economic crisis.

"I've never seen the consumer or the Americans just generally more fearful than this," Buffett said. "And they're also confused."

Buffett blamed partisan "bickering" on Capitol Hill for adding to the confusion.

The latest example was seen on ABC's This Week, as Republican Senator Richard Shelby and Democratic Senator Evan Bayh debated the merits of allowing U.S. banks to fail.

"Close them down," Senator Shelby stated. "Get them out of business. If they're dead, they ought to be buried."

"If they were to go down, the problem is, it's not just them," Senator Bayh said. "They take - it's called, you know, collateral damage."

Although he's optimistic about long-term prospects, Buffett urged Republican and Democratic leaders to deliver a consistent message and support President Barack Obama's efforts to fight what he calls an "economic war."

Meanwhile, a new report by the World Bank says the global economy continues to shrink.

The international lending and development organization predicts world trade will fall in 2009 by the largest amount in 80 years, with the sharpest losses expected in Asia.