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Deficit pp 35-53 | Cite as

Deficit and Debt Projections

  • Marie Bussing-Burks

Abstract

There are two ways to influence the economy—through fiscal policy (using government spending or taxation to impact the economy) or through monetary policy (adjusting money supply and interest rates to impact the economy). Some policymakers favor the deliberate actions of fiscal policies, others prefer the flexibility of monetary actions, while many advocate a powerful combination of the tools. All concur that unlike monetary policy, fiscal stimulus actions spur deficits. So let’s take a quick look at how fiscal and monetary policy tools work. Then you can decide if the benefits of fiscal policies are worth such high deficits.

Keywords

Gross Domestic Product Monetary Policy Fiscal Policy Money Supply Government Spending 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. 1.
    Ben Bernanke, “The Crisis and the Policy Response,” Stamp Lecture at the London School of Economics, Jan. 13, 2009 (transcript available at www.federalreserve.gov/newsevents/speech/bernanke20090113a.htm).
  2. 3.
    “Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from October 2010 Through December 2010.” February 2011, Congressional Budget Office. Available at www.cbo.gov (Accessed February 27, 2011).
  3. 4.
    Bureau of the Public Debt, “Our History,” www.publicdebt.treas.gov/history/history.htm (accessed February 6, 2011).
  4. 5.
    “Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from October 2010 Through December 2010.” February 2011, Congressional Budget Office. Available at www.cbo.gov (Accessed February 27, 2011).
  5. 6.
    Benjamin Page and Felix Reichling, CBOMa croeconomic Analysis Division, “Estimated Impact of ARRA on Employment and Economic Output from October 2010 through December 2010,” February 23, 2011. http://cboblog.cbo.gov/?p=1852 (accessed February 24, 2011).

Copyright information

© Marie Bussing-Burks 2011

Authors and Affiliations

  • Marie Bussing-Burks

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