What impact will swelling deficits have on financial markets?
It is their responsibility to ensure economies are competitive, productive and not vulnerable to financial shocks via excessive debts, deficits or balance of payment crises.
But others, such as Robert Rubin, a former treasury secretary, warn that the financial markets, looking forward to deficits as far as the eye can see, may take fright.
Until the war is over, it is hard to see how arguing about the exact size of government budget deficits will soothe the nervous financial markets.
EU. Even so, big deficits plus any new wave of financial panic could yet spook investors.
The financial disaster has handcuffed discretionary spending, ensured deficits till hell freezes over, shafted young Americans who hoped to retire some day and, on top of it all, there's Iraq.
After all, we had gone through a decade of sluggish job growth and jobs being shifted overseas, and going from surpluses to deficits, all culminating in a financial crisis on Wall Street.
They are responsive to the challenges facing America after more than 10 years of stagnation, an unemployment rate stuck near 9% for 2.5 years, trillion-dollar deficits and the ongoing risk of financial crisis.
The financial crisis and economic downturn also have worsened fiscal deficits and public debt levels, especially in developed countries where economic activity has been slower to recover.
FORBES: The Rich Are Now Richer Than Before The 2008 Credit Meltdown
It could even solve most of the financial woes of New York and California, conquering deficits, funding education and social programs if they would just embrace the opportunity.
FORBES: The International Energy Agency Catches Up With America's Oil Producers
But as financial panic subsides, the prospect of huge current deficits combined with the coming entitlements crunch could cause investors to worry America will one day inflate its way out of the debt or even, in the extreme, default.
And then we have what happened after the implementation of a series, two, massive tax cuts, the benefits of which went disproportionately to top earners, surpluses turned to deficits and a cascading economic crisis and financial crisis and recession the likes of which none of us in our lifetimes have ever seen.
Most alarmingly, Washington combats the recession by rehashing the policies which engineered financial turmoil: low rates, weak dollars and large deficits.
FORBES: Banking Trends Offer Clues To The Real Business Cycle
They have lost the confidence of financial markets and are being pushed by their rescuers to slash deficits.
We ended up moving from surplus to deficits, and it all culminated in the worst financial crisis since the Great Depression.
Germany's predilection for all-round austerity is a mistake, with financial markets now worried as much about deep recession as about deficits.
The EU is in the grips of a major financial crisis with out-of-control PIIGS debt and deficits, especially with Greece at the moment.
Financial markets seemed happy to provide the money to allow countries to run deficits on both the fiscal and trade accounts.
The Obama approach channels austerity policies in Greece and Spain which have sought to narrow budget deficits by massive tax increases, but have only exacerbated the financial crisis in both countries.
FORBES: The Choice Of 2012: Obama Austerity vs. Romney Growth
If we had a truly independent Federal Reserve (one that was not willing to buy all the excess government debt) these larger deficits would make much more of an immediate and discernable impact on the financial markets and the economy.
FORBES: Cowardice Of Compromise As Spineless Politicians Sink U.S. Deeper Into Debt
Meanwhile, deficits turn into increasing levels of sovereign debt that can only be funded by financial repression.
应用推荐