Monday, August 22, 2011

What do economists think we should do?

A recent survey of economists at the annual NABE meeting found relatively sound views regarding deficit reduction and fiscal policy. The survey found that 56 percent of the NABE members felt "that the federal deficit should be reduced only or primarily through spending cuts."  Another "37 percent said they favor equal parts spending cuts and tax increases. The remaining 7 percent believe it should be done only or mostly through tax increases."  
As for how to reduce the deficit, nearly 40 percent said the best way would be to contain Medicare and Medicaid costs. Nearly a quarter recommended overhauling the tax system and simplifying tax rates and exemptions. About 15 percent said the government should enact tough spending caps and cut discretionary spending.
According to the survey of 250 economists who are members of NABE, nearly 49 percent of those responding said the country's fiscal policy should be more restrictive, while nearly 37 percent said they believe the government should do more to stimulate the economy.