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And even a moderate recession could leave the budget projections unrealistic, as could a substantial drop in the stock market.
The serial surpluses of the 1990's and 2000 let them build reserves to tide them over in a moderate recession without touching programs and taxes.
With the exception of cases in which the probabilistic approach is used to generate the adverse scenario, the adverse scenario will at a minimum contain a mild to moderate recession.
As you know, the U.S. economy suffered a moderate recession between March and November 2001, largely traceable to the ending of the dot-com boom and the resulting sharp decline in stock prices.
Pennsylvania Democrats had a sour view of the economy _ four in 10 said the country is in a serious recession and at least as many called it a moderate recession.
However, this growth turned into a moderate recession after 1998. 1. Peru formally became a member of APEC in November 1998.
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Legislatures and central banks throughout the world now routinely attempt to prevent or moderate recessions.
In the 1980s and 1990s, economists came around to the view that only monetary policy could act quickly enough to reverse or moderate a recession.
Recessions in Europe and China will fuel a worldwide rush into the dollar and Treasurys as safe havens, even if the U.S. suffers the moderate 2012 recession Im forecasting.
And governments have also been prudent about building up their reserves - as of July 2007, state rainy day funds stood at 10% of total budgets, which would have been sufficient to deal with a moderate cyclical recession.
To be sure, policy makers should have acted sooner to provide stress tests and ensure adequate capital, at least when Bear Stearns failed, and the fiscal stimulus may have eventually moderated the recession, but it was the liquidity backstop of the financial system that drew the economy out of the abyss.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com