The Economic Outlook and Budget Challenges

The U.S House Budget Committee held a full committee hearing on the economical outlook and budget challenges.

The discussion focused on the economical problems that are facing America today and the crucial issue of unemployment. The need to create more jobs was discussed and a solution that was presented favored lowering taxes on private business. This solution will could lead to an increase in employment.

A key point that was stressed involved investing in a long term economic strategy, to be able to increase the employment and create sustainable jobs.

Douglas W. Elmendorf, Director of the Congressional Budget Office, presented testimony regarding the state of the economy and issues in developing an effective policy response.
Elmendorf said that America must change its economical policies and make them more efficient to recover from the economical downturn it has suffered.

” The expected severity and persistence of economic weakness have led the great majority of economists to think that both large-scale fiscal stimulus and significant new financial and monetary policies are needed to generate a strong recovery in the next few years. Fiscal policies are most effective if they are timely, are cost effective and do not exacerbate the nation’s long-run fiscal imbalance,” Elmendorf stated.

He also referred to the difficulties in constructing a stimulus package that is economically effecient and statisfying the broader objectives. Policymakers want to know which people benefit from a policy and what society will receive in return.

Kevin Hasset, Senior Fellow and Director of Economic Policy Studies at the American Enterprise Institute, presented testimony that America’s economy has been through bad times before and that the economy recoverd. Hasset also highlights the importance debt could have.

” We have not yet reached the point where skyrocketing debt levels have caused heightened concerns among investors in U.S. Treasuries. If this Committee wishes to avoid testing those waters, it should consider stimulus efforts with genuine steps toward run deficit reduction,” Hasset stated.