Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (16454)	4/9/2010 1:48:42 PM
From: Lane3	Read Replies (1) \| Respond to of 42652

I haven't given much thought to fixing the deficit as I don't think anyone has the will to do it so I was surprised by these comments by Elmendorf about loss of stimulus. “There are trade-offs,” he said. “The biggest challenge that fiscal policy poses to macroeconomic stability in the next few years is actually the rate at which fiscal stimulus declines.” Elmendorf says he expects the budget deficit this year to be about 10 percent of gross domestic product. If the 2001 and 2003 tax cuts passed under President Bush are not extended, the deficit would fall from 10 percent of GDP this fiscal year to 4 percent in FY 2012. “That decline of 6 percent of GDP is the most rapid withdrawal of fiscal stimulus that we’ve seen since the end of the Second World War,” Elmendorf says. “I think people who are concerned that actions that would raise taxes or cut spending in the next few fiscal years would accentuate this already rapid withdrawal of fiscal stimulus – I think that’s a very legitimate concern.” Elmendorf suggested a consensus among economic experts that “some point beyond the next few years” would be the best time to reduce the deficit. That view echoed a speech by Federal Reserve chairman Ben Bernanke on Wednesday, in which he said immediate deficit reduction would be “neither practical nor advisable” in the current economy.