Government deficits and the future economy

Article Abstract:

Economists disagree on the impact of the government's budget deficits because some feel deficits harm economic growth while others see a neutral or even positive impact. The problems associated with deficits are actually the result of inadequate savings levels because savings should finance the government and national savings are too little while international savings are unreliable, especially for a government in debt. However, reducing the deficit through taxation can also negatively impact economic growth and has negative political consequences, making it an unlikely resolution.

Economic aspects, Budget deficits

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Growth is harder but should continue through 1997

Article Abstract:

Economic growth slightly below that experienced in 1996 is expected in 1997, but inflationary pressures are expected to increase. If any sector leads the economy, it will be the international trade sector. Consumers increased spending in 1996, capital spending can be expected to slow after four years of acceleration, and government spending will continue to be a declining percentage of GDP. After 50% growth since 1995, the stock market may be due for a correction, but the impact of such a correction may be minimized by timely interest rate increases by the Federal Reserve.

National Income & Expenditure, Economic indicators

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The consensus forecast is a wish, not a likelihood

Article Abstract:

The consensus economic forecast for 1995 involves continued growth but without inflation. This forecast is unlikely to become reality because the Federal Reserve Board has not yet restrained economic activity which is necessary to prevent inflation. Any response to this continued growth, whether inflation or higher short-term rates, is likely to generate another recession unless growth is limited.

Forecasts and trends, Economic development, Interest rates, Monetary policy

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