Home Mail MemberMap Chat (0) Wallpapers
Go Back   ChiefsPlanet > The Royal Lounge > D.C.

 
 
Thread Tools Display Modes
Prev Previous Post   Next Post Next
Old 05-22-2012, 08:38 AM   Topic Starter
Direckshun Direckshun is offline
Black for Palestine
 
Direckshun's Avatar
 
Join Date: Oct 2006
Location: Springpatch
Casino cash: $12951
Grow Now, Cut Deficits Later

The Wall Street Journal talking some sense.

http://online.wsj.com/article/SB1000...googlenews_wsj

The Long and Short of Fiscal Policy
The economy is too shaky to go cold turkey. We need more stimulus now and deficit reduction later..

by Alan Binder
May 21, 2012, 7:03 p.m. ET

Quote:
Can we talk about the federal budget deficit? Better yet, can we think about it? For there has been a lot more talking than thinking. One persistent point of confusion arises from the radically different macroeconomic effects of larger budget deficits in the short and long runs.

In the short run—let's say within a year or so—a larger deficit, whether achieved by spending more or taxing less, boosts economic growth by increasing aggregate demand. It's pretty simple. If the government spends more money without raising anyone's taxes to pay the bills, that adds to total demand directly.
Quote:
But don’t we need to reduce the deficit—and by large amounts? Yes, we do, but that’s in the long run, where the effects of larger deficits are mostly harmful to economic growth. In the jargon, more government borrowing tends to ‘crowd out’ private borrowers by pushing interest rates up… There is an important exception, however, which is highly germane to today’s situation… Right now, the U.S. government can borrow for 10 years at under 2% per annum. At these super-low interest rates, you don’t have to be a genius to find many public infrastructure projects with strongly positive net present values. Borrowing to make such investments will enhance long-run growth, not retard it.

Looking ahead, the lion’s share of projected future deficits comes from rising health-care expenditures. Some of this cost escalation stems from heavier usage—consuming more health services per capita. But most of it comes from ever-rising relative prices; health care just keeps getting more expensive relative to almost everything else… So here, in brief, is my three-step rehab program for our nation’s fiscal policy. First, enact a modest stimulus, sharply targeted on job creation—and avoid falling off the fiscal cliff. Second, once the economy is ready, start on something that resembles the 10-year Simpson-Bowles deficit-reduction plan—which would pay for the stimulus 15-20 times over. Third, figure out how to bend the health-care cost curve downward.
Posts: 45,115
Direckshun is obviously part of the inner Circle.Direckshun is obviously part of the inner Circle.Direckshun is obviously part of the inner Circle.Direckshun is obviously part of the inner Circle.Direckshun is obviously part of the inner Circle.Direckshun is obviously part of the inner Circle.Direckshun is obviously part of the inner Circle.Direckshun is obviously part of the inner Circle.Direckshun is obviously part of the inner Circle.Direckshun is obviously part of the inner Circle.Direckshun is obviously part of the inner Circle.
  Reply With Quote
 

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On

Forum Jump




All times are GMT -6. The time now is 03:52 PM.


This is a test for a client's site.
A new website that shows member-created construction site listings that need fill or have excess fill. Dirt Monkey @ https://DirtMonkey.net
Powered by vBulletin® Version 3.8.0
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.