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What's more important, economic growth or deficit reduction?

NEW YORK – Economists are satisfied with the Federal Reserve's current interest rate policy, but they're divided over how the central bank should proceed over the next 12 months, a new survey finds.

The latest semiannual survey by the National Association for Business Economics, set to be released Monday, also showed that economists are divided over how the government should stimulate the economy. Most oppose another stimulus package but rank economic growth as a higher priority than deficit reduction.

"The survey shows the uncertainty about the current state of the economy and how weak it truly is," said Lynn Reaser, NABE's president and the chief economist for Point Loma Nazarene University, in an interview with The Associated Press. "No one knows where the economy is truly heading."

http://news.yahoo.com/s/ap/us_nabe_survey

 
sweet-a-kins

Asked by sweet-a-kins at 9:31 AM on Aug. 30, 2010 in Politics & Current Events

Level 34 (67,502 Credits)
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Answers (15)
  • I think that right now economic growth is more important - the economy is soft, which is helping to grow the deficit because of the governmental programs being launched to help combat it. IMO, a strong economy will stop the bleeding, and result in reducing the deficit over time.
    Scuba

    Answer by Scuba at 9:58 AM on Aug. 30, 2010

  • IMO, we have reached a point where the deficit is front and center. The economy cannot grow when the population is saddled with tax debt they cannot pay. If we keep growing the deficit we are going to continue to kill off the businesses that create jobs and the high level earners that make up 30% of the spending.

    Allowing the tax cuts to expire will also have the same effect as the continued growth of the deficit. They are going to have to make big cuts in spending...not increase tax rates/create new taxes to get us out of this mess. Give the small businesses and the people the tax cuts they need...jobs will be created..the wealthy will spend more..more jobs will be created..thus INCREASING tax REVENUES. Add in a healthy cut of unnecessary spending and PRESTO the economy is back on track and the defict will be reduced. Of course it isn't really presto, all things have to work together to make it happen.
    yourspecialkid

    Answer by yourspecialkid at 10:20 AM on Aug. 30, 2010

  • Ha ha gertie! I just read your answer! I suppose I am one of those you speak of!

    I don't just blow smoke out my ass. I have more than a little experience in this area. I have a degree in finance and spent years in the banking industry as a trust officer. I then started a business in my guest room and grew it to a $300,000 a year one before buying 2 more businesses. Scoff if you wish, but I am representative of the group of people they should be asking what needs to be done. If you are sick you ask your doctor what is wrong..if there are no jobs you ask the people that create them what is wrong.
    yourspecialkid

    Answer by yourspecialkid at 10:26 AM on Aug. 30, 2010

  • Common sense tells me we have a catch-22. The debt is hindering growth, yet without growth we will never pay down the debt. If we keep liberal/progressives in charge we will never pay the debt down anyway. Same applies without TRUE conservatives in charge.
    Carpy

    Answer by Carpy at 10:47 AM on Aug. 30, 2010

  • I think why they appear to be "torn" on the issue is because while *most* can agree that economic growth is extremely important to be able to pay off debt... we shouldn't be incurring more debt in order to attempt to stimulate that growth. First, because it doesn't work, and secondly because we shouldn't be building more debt. So, as far as the government is concerned... reducing the deficit should come first. As far as the people are concerned, building the economy should come first.

    The ONLY thing the government should do to stimulate economic growth is to slash taxes. Imagine if we had just halted the income tax for one year... we would be less in debt than we are now and it would have gone much further to get the economy going because businesses would have taken the extra money to grow their business and consumers would have taken the money and spent it.
    LeanneC

    Answer by LeanneC at 12:29 PM on Aug. 30, 2010

  • They are linked. I think we have to encourage small business growth, if we can encourage that and lower unemployment payments (through jobs created) which will generate more tax income (paychecks) and economic growth through purchasing. If we couple that with a healthier lifestyle (tax cuts or something) for gym memberships and regular checkups - better tax reductions for Organic food growth to lower the cost and a handle on welfare that actually works we could be digging ourselves out of this hole.
    urkiddingright

    Answer by urkiddingright at 10:49 AM on Aug. 30, 2010

  • I'm sorry, but i don't see one being more important than the other. Why would you think we should only do one or the other? We need to address both of them and NOT with more of Americans tax dollars.
    itsmesteph11

    Answer by itsmesteph11 at 11:49 AM on Aug. 30, 2010

  • someone had a plan to pass a million dollars out to each citizen... do that, and pay the rest back.
    lovinangels

    Answer by lovinangels at 11:18 AM on Aug. 30, 2010

  • http://news.yahoo.com/s/ap/us_nabe_survey


    Uncertainty over the fate of Bush admin tax cuts, which are due to expire by year-end, also is feeding into the muddled outlook, Reaser said. A majority of those surveyed don't believe that any of the individual income tax cuts, dividends tax cuts and capital gains tax cuts should be allowed to expire. Reaser stressed that the economists surveyed are looking for more clarity on future tax and regulatory policies that could help improve the job picture.

    sweet-a-kins

    Comment by sweet-a-kins (original poster) at 9:32 AM on Aug. 30, 2010

  • I don't just blow smoke out my ass. I have more than a little experience in this area. I have a degree in finance and spent years in the banking industry as a trust officer.


    I don't know why you would take offense to what she said. It was about people who don't have any knowledge ..you clearly do..so why do you think she was speaking of YOU?

    sweet-a-kins

    Comment by sweet-a-kins (original poster) at 10:28 AM on Aug. 30, 2010

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