325_Supplement8

325_Supplement8 - Department of Economics University of...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Intermediate Macroeconomic Analysis Spring 2011 1 Department of Economics University of Maryland Economics 325 Intermediate Macroeconomic Analysis Supplement 8 Professor Sanjay Chugh Spring 2011 The following article appeared in the Economist on February 17, 2011. It discusses a few highlights of the Obama administration budget package released on February 14, 2011. Under the projections, the level of the federal debt would continue growing for the next 10 years (at least, since that is simply the end of the forecast horizon) as fiscal deficits continue throughout that period. Due to modest declines in the yearly deficits over the next decade and projected GDP growth over that period, the ratio of federal debt to GDP, a widely-watched indicator of the “sustainability” of the budget, is projected by administration officials to stabilize around 80%. The article’s analysis, however, is skeptical that the projections are even as optimistic as that. For example, one of the assumptions underlying the administration’s projections is GDP growth over the next decade which is much more optimistic than any private sector forecast of GDP growth.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Intermediate Macroeconomic Analysis Spring 2011 2 Austerity lite A feeble offering from the president; but there are a few signs of hope The federal budget Feb 17th 2011 | WASHINGTON, DC | from PRINT EDITION FOR years America’s politicians have delivered only pious words about the deficit. With the financial crisis and the recession now in the rear-view mirror, this year was supposed to be the time when Barack Obama and Congress would shift towards austerity. The competing budget proposals of congressional Republicans and the president do contain hints that such a moment has arrived—but only by the sadly low standards of the current fiscal debate.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 11/01/2011 for the course ECON 325 at Maryland.

Page1 / 5

325_Supplement8 - Department of Economics University of...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online