Beyond that looms the unsustainable long-run debt trajectory.
And yes, it's quite possible that even aside from the political-economy angle, the weak stimulus directly made our long-run debt position worse.
Fiscal austerity in the face of a depressed economy does little to improve your long-run debt position, and may even hurt it.
That failure increases our long-run debt problem, which has the potential to reduce long-run growth, and that makes people wary of doing stabilisation policy at all.
The Federal Reserve will remain highly attentive to developments abroad and to their potential effects on the U.S. economy.On fiscal issues, Mr Bernanke basically punts, saying that America needs to address its long-run debt issues, and so on.
OVER at Economix, Alan Kreuger suggests a way to address both the current economic downturn and long-run debt and imbalances:Why not pass a 5 percent consumption tax to take effect two years from now?
The long-run debt problem — the result of imprudent fiscal decisions before the recession, escalating health care costs and an aging population — must be addressed once the economy has recovered.
"The trouble is, although it may work in the short run, in the long run the debt burden will be bigger and the adjustment process more painful".
Cyprus had been a blip on the radar screen of Europe's long-running debt crisis — until now.
