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Exact(4)
It is much harder to agree on restraints where the risk of fiscal collapse is distant.
Confidence he repeated this word many times.He made clear that the administration isn't being entirely incautious about the risk of fiscal drag on recovery.
My hope is that dimming market expectations are mostly due to American fiscal uncertainty and mostly amount to pricing in of a low but real risk of fiscal disaster.
On the other hand, if lawmakers decided to undo or delay all of the scheduled changes — in effect, extending today's policies indefinitely — there would be no progress toward long-term deficit reduction, and that would raise the risk of fiscal crisis in the future.
Similar(56)
For the past two years, the Greek story has, as one recent paper on economic policy put it, been "interpreted as a parable of the risks of fiscal profligacy".
In addition, the rescues themselves have implanted other risks — of fiscal crisis, of inflation and of endemic moral hazard, in which rescued institutions revert to reckless risk taking, secure in the knowledge that they will be bailed out if need be.
Still, the enthusiastic market response has hardly silenced the debate between those who declare that Japan is now on the threshold of a welcome rise in prices, profits and tax revenue, and doomsayers who warn that officials are ignoring risks of fiscal insolvency, bond sell-offs and runaway inflation.
He has even spoken out against the risks of fiscal contraction, and is the first Fed chairman since FDR's chairman, Marriner Eccles, to talk about the risks of protracted unemployment as well as the risks of inflation.
Consider the paper Orszag co-authored with Rubin and Allen Sinai in 2004, entitled "Sustained Budget Deficits: Longer-Run US Economic Performance and the Risk of Financial and Fiscal Disarray".
"The risk of substantial fiscal deterioration, and of deteriorating coherence and credibility in economic policymaking, remain the key rating sensitivities".
Given that capital expenditures have been weak recently, some economists believe businesses will start spending more if Congress ends or at least delays the risk of severe fiscal tightening.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com