Deficits
in sentence
2171 examples of Deficits in a sentence
But anyone counting on interest rates staying low because conservative governments are averse to
deficits
needs a history lesson.
Nonetheless, while the Trump administration is wrong to put so much emphasis on trade
deficits
with individual countries, doing so in China’s case has had the favorable effect of leading to policies that reduce foreign barriers to US exports.
Clearly, the current fiscal path being pursued in most advanced economies – the reliance of the United States, the euro zone, the United Kingdom, Japan, and others on very large budget
deficits
and rapid accumulation of public debt – is unsustainable.
These large fiscal
deficits
have been partly monetized by central banks, which in many countries have pushed their interest rates down to 0% (in the case of Sweden to even below zero), and sharply increased the monetary base through unconventional quantitative and credit easing.
If they have built up large, monetized fiscal deficits, they should raise taxes, reduce spending, and mop up excess liquidity sooner rather than later.
But, if governments maintain large budget
deficits
and continue to monetize them as they have been doing, at some point – after the current deflationary forces become more subdued – bond markets will revolt.
Smaller economies – like some in Europe – that have large deficits, growing public debt, and banks that are too big to fail and too big to be saved may need fiscal adjustment sooner to avoid failed auctions, rating downgrades, and the risk of a public-finance crisis.
Moreover, the risk of such a policy mistake is high, because the political economy of countries like the US may lead officials to postpone tough choices about unsustainable fiscal
deficits.
In countries where asking a legislature for tax increases and spending cuts is politically difficult, monetization of
deficits
and eventual inflation may become the path of least resistance.
First, America’s trade deficit is multilateral: the US ran
deficits
with 88 nations in 2010.
Blaming China merely impedes the heavy lifting that must be done at home – namely, boosting saving by cutting budget
deficits
and encouraging households to save income rather than rely on asset bubbles.
In the past, Italy’s external
deficits
and surpluses were of roughly similar size, meaning that the country is not a net debtor.
Making matters worse, because an export-led recovery yields less revenue – value-added taxes are rebated on exports, but collected on imports – seemingly strong government finances quickly turned into large
deficits.
In Greece’s case, the problem was compounded by the fact that, during the boom years, the large fiscal
deficits
had been financed entirely by capital inflows.
An advisory panel to Japan’s finance minister recently warned that rising interest rates could exacerbate government deficits, and recommended that the government undertake serious fiscal reforms to avoid further rises in yields.
The Weimar Republic had incurred huge deficits, owing in part to meet reparations payments mandated by the Treaty of Versailles, but it was unable to borrow, so the central bank printed money.
If trade data were re-calculated to reflect the country of origin of various components of value-added, the general picture would not change, but the relative magnitudes would: higher US
deficits
with Germany, South Korea, Taiwan, and Japan, and a dramatically lower deficit with China.
But, while the total reflects bilateral
deficits
with just about everyone, the US Congress is obsessed with China, and appears convinced that the primary cause of the problem lies in Chinese manipulation of the renminbi’s exchange rate.
But the effect was similar: an unsustainable pattern of income and employment generation, and lower productivity and competitiveness in these economies’ tradable sectors, leading to trade deficits, stunted GDP, and weak job creation.
As long as America economic policy remains focused primarily on deficits, domestic demand, exchange rates, and backsliding on trade openness, its investment deficiencies will remain unaddressed.
And lower interest rates over the past decade – brought down to German levels through Greece being allowed, rather generously, into the euro zone – led to little more than further
deficits
and a dangerous buildup of government debt.
Whenever an economy goes into recession,
deficits
appear, as tax revenues fall faster than expenditures.
That ended in 2010, after Greece admitted that it had lied about its budget
deficits
and debt.
Spain, too, is in serious trouble, owing to the budget
deficits
of its traditionally independent regional governments, the weakness of its banks, and its need to roll over large sovereign-debt balances each year.
It is already clear that the EU’s recently agreed “fiscal compact” will not constrain budget
deficits
or reduce national debts.
India’s economy is continuing to grow, but faces rising inflation, fiscal and current-account deficits, a slowdown in agricultural growth, and infrastructure bottlenecks.
One could argue that OMT would be used as a part of the ECB’s monetary policy, and not to finance budget
deficits
in some member states, which the ECB’s statute does not permit.
From quantitative easing to record-high federal budget
deficits
to unprecedented bailouts, they have done everything in their power to mask the pain of balance-sheet repair and structural adjustment.
The CBR’s warning of twin fiscal and current-account
deficits
assumed that oil prices would remain steady, at $104 per barrel in 2015.
Large fiscal
deficits
and slow growth might convince foreign exchange markets that there is little future in the euro, fueling a wave of selling – and hence losses for central bank holders.
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