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CBO to debt committee: Cutting now could hurt, recommends supporting economy today, restraint later.

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jefferson_dem Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-13-11 06:49 PM
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CBO to debt committee: Cutting now could hurt, recommends supporting economy today, restraint later.
CBO to debt committee: Cutting now could hurt

By Jeanne Sahadi @CNNMoney September 13, 2011

NEW YORK (CNNMoney) -- Cutting spending and raising taxes now could put a drag on the economy.

That was the message Congressional Budget Office Director Douglas Elmendorf delivered Tuesday to the new congressional debt committee, which is in week two of its hurry-up assignment to propose ways to slash deficits.

The good news? There are fiscally responsible ways to spur the economy while simultaneously bringing down long-term deficits, Elmendorf told the 12-member panel.

The "most effective" budget approach, he said, "would be changes in taxes and spending that would widen the deficit today but narrow it later in the decade."

<SNIP>

Thus, he said, "there is no inherent contradiction between using fiscal policy to support the economy today ... and imposing fiscal restraint several years from now when output and employment will probably be close to their potential."

<SNIP>

http://money.cnn.com/2011/09/13/news/economy/debt_commi...
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Curmudgeoness Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-13-11 06:53 PM
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1. Well, duh! This has always been the case.
When the ecomony is cratering, cutting all the government jobs and programs is the last thing that should be considered.

I have been saying this till I am blue in the face----but what do I know!
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flpoljunkie Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-14-11 07:52 AM
Response to Reply #1
5. Predictable, the R's have won the PR debate that cutting spending will help the economy.
So far, that is!
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Curmudgeoness Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-14-11 07:56 PM
Response to Reply #5
7. And how will we change the debate? Ordinary people
know that in their own household, they have to cut spending when times get tough. Some of us know that the government does not work like a household, but how do we convince people who only know what they would have to do? All I hear anymore is that the government is not in the business of creating jobs, and cannot do it even if they tried. I know that with the right policies, they can improve the economy and unemployment, but I can't articulate this to non-believers.
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HockeyMom Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-13-11 07:01 PM
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2. My WIDOWED Grandma raised 2 kids
literally on her hand and knees during the Great Depression, and REUFSED to re-marry. What a BAD MOTHER she was. Children need a FATHER, no matter what.
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LiberalFighter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-14-11 07:26 AM
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3. How will they get around the requirement of making the cuts
without the triggers happening?
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GoCubsGo Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-14-11 07:35 AM
Response to Reply #3
4. The start date of the cuts does not have to be immediate.
One of the President's most recent proposals (his "jobs" plan?) called for cuts, but they aren't supposed to go into effect for a few years. They were back-loaded to go into effect after the economy gets rolling again. I don't believe there is anything in the "debt" bill that said the cuts have to go into effect immediately. I have no doubt someone will correct me if I am wrong here.
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flpoljunkie Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-14-11 07:54 AM
Response to Reply #4
6. Automatic cuts won't take effect until 2013, if the Super Committee cannot get the job done.
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