Macro CS Quarterbacks MP %26 FP

Macro CS Quarterbacks MP %26 FP - Quarterbacks Get Out'Hail...

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Quarterbacks Get Out 'Hail Mary' Economy Passes By JON HILSENRATH WSJ Aug. 9, 2010 July's dismal jobs report poses a dangerous dilemma for the country's officials. The government has exhausted traditional measures to get the economy growing more briskly, having already cut interest rates to near zero and committed to more than $800 billion in fiscal stimulus. Agence France-Presse/Getty Images Fed Chief Bernanke. Calls for inflation above the informal 1.5% to 2% mark could get louder. Journal Community With conventional tools off the table, it might take a "Hail Mary" pass from policy makers to recharge the economy if an anemic recovery slows even further.
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Most ideas have drawbacks. Infrastructure spending, for instance, has appeal in the Obama administration, because many of the nation's roads, bridges and tunnels need updating and because so many construction workers are dormant. But new spending would spark an outcry in the face of trillion-dollar budget deficits and no plan in place to reduce them. Republicans prefer tax cuts—permanent ones—but they also face deficit constraints. Laura Tyson, a professor at University of California, Berkeley's Haas School of Business who served as President Bill Clinton's chief economic adviser, favors a big, long-term investment program funded through Build America bonds, federally subsidized taxable municipal bonds, and a national infrastructure bank, something President Barack Obama has proposed. The government would put in capital and the bank would raise its own debt to fund projects, sometimes partnering with private businesses. The catch: This also adds to government debt, only indirectly. Robert Reich, who served as Mr. Clinton's labor secretary, proposes a payroll-tax holiday on the first $20,000 of workers' income, funded by a new social-security tax on workers' annual income of more than $250,000. Economic theory says low-income people are more likely to spend a dollar of added income than high-income people, so getting money in their hands gooses output. "It could be done right away, immediately putting more money in the hands of consumers likely to spend it, and lowering the cost to
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Macro CS Quarterbacks MP %26 FP - Quarterbacks Get Out'Hail...

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