Deficits
in sentence
2171 examples of Deficits in a sentence
In addition, governments need to run extra-large
deficits.
For starters, while economists are correct to point out that bilateral trade
deficits
cannot be considered in isolation, the fact remains that China’s surplus with the US – which hit a new record in September – is politically unsustainable.
Export and public-sector revenues have declined, giving way to widening current-account and fiscal
deficits.
Third, in countries running current-account deficits, consumers need to cut spending and save much more for many years.
Seventh, monetization of fiscal
deficits
is not inflationary in the short run, whereas slack product and labor markets imply massive deflationary forces.
Finally, the reduction of global imbalances implies that the current-account
deficits
of profligate economies (the US and other Anglo-Saxon countries) will narrow the current-account surpluses of over-saving countries (China and other emerging markets, Germany, and Japan).
Increased debt and budget
deficits
are one likely result, putting at risk the accomplishments of more than a decade of effort to reform the economy.
By the early 1970s, the US itself was running trade deficits, and the dollar was in oversupply.
To be sure, after the 2008 global financial crisis, the European Union did establish a Macroeconomic Imbalance Procedure to fine eurozone countries with surpluses exceeding 6% of GDP or
deficits
exceeding 4% of GDP.
The economics of fiscal
deficits
are easy: boost economic growth, raise taxes, or lower expenditures.
Deficits
and debts can explode, with no path towards resolution.
Given that eurozone members rejected even the idea of automatic sanctions for countries with excessive deficits, they are not likely to countenance such a wide ranging loss of sovereignty.
But today, countries with rising budget deficits, like Ireland, along with countries with high levels of public debt, like Greece and Italy, are at risk to pay substantially higher rates on their government bonds.
Encouraging weak countries to prolong their reliance on budget
deficits
by holding out the hope of a de facto bail-out would be very costly for EMU’s more solid countries, while undermining EMU’s hard-won credibility as an area of stability and fiscal soundness.
Any policy that forces countries that opted for fiscal solidity to pay for those with large
deficits
and high debt levels would strongly undermine public support for the euro zone.
The compact – technically called the Treaty on Stability, Coordination, and Governance in the Economic and Monetary Union – requires member countries to introduce laws limiting their structural government budget
deficits
to less than 0.5 % of GDP (or less than 1% of GDP if their debt/GDP ratio is “significantly below 60%”).
But, if forecasts are biased, fiscal rules will not constrain budget
deficits.
Indeed, in a new paper, co-authored with Jesse Schreger, we show that eurozone members’ bias in official forecasts can be neatly characterized as responding to the SGP’s 3%-of-GDP limit on budget
deficits
in 1999-2011: each time governments exceeded the limit, over-optimistic forecasts followed.
In April 2010, the leader of this school, Harvard University’s Alberto Alesina, assured European finance ministers that “even sharp reductions of budget
deficits
have been accompanied and immediately followed by sustained growth rather than recessions even in the very short run.”
The results of austerity have been what any Keynesian would have expected: hardly any growth in the UK and the eurozone in the last two and a half years, and huge declines in some countries; little reduction in public deficits, despite large spending cuts; and higher national debts.
With lower and more realistic growth forecasts, fiscal
deficits
in the short to medium term are viewed as more dangerous.
Even Bachelet’s critics agree that Chile’s basic macroeconomic policies will not change: an independent central bank committed to price stability, a free-trade regime with a floating currency, and a fiscal policy that will keep
deficits
and public debt low.
Europe urgently needs an economic doctrine that, despite today’s deficits, preserves funding for the investments and research that promote growth.
Thus, even as China is compelled to shift from exports to domestic consumption in order to sustain growth, India continues to rely on inward investment, exports of services and raw materials, and lower fiscal and current-account
deficits
to maintain its growth course.
This is a further reason why we need economic union: markets would be less likely to react negatively to temporarily higher
deficits
if they were more confident in future growth prospects.
As America went into battle, with
deficits
already soaring from his 2001 tax cut, Bush decided to plunge ahead with yet another round of tax “relief” for the wealthy.
Moreover, as Bilmes and I argued in our book The Three Trillion Dollar War, the wars contributed to America’s macroeconomic weaknesses, which exacerbated its
deficits
and debt burden.
The
deficits
to which America’s debt-funded wars contributed so mightily are now forcing the US to face the reality of budget constraints.
First, while we are still in a world of global deflation, large, monetized fiscal
deficits
are fueling concerns over medium-term inflation.
But it does not have a symmetrical effect, because government debt from southern European countries, where the debt binges and current-account
deficits
of the past occurred, are mostly repurchased abroad.
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