fiscal deficits

Now think what will happen if, after two or more years of monstrous fiscal deficits, the US is still mired in unemployment and slow growth.

Why should it be so easy to fund such huge fiscal deficits even after central banks have stopped their buying of government bonds?

While this increased the rate of growth, it also led to high fiscal deficits and a worsening current account.

Worse, Germany does wish to see a sharp move by its partners towards smaller fiscal deficits.

After all, the currency has no yield support, a continuing trade deficit and the prospect of endless fiscal deficits.

The latter were largely the result of the crisis: governments let fiscal deficits rise, as the private sector savagely retrenched.

More precisely, what Germany wants to see is a sharp cutback in fiscal deficits throughout the eurozone.

If governments had tried to close fiscal deficits, as they attempted to do in the 1930s, we would be in another Great Depression.

In practice, the most likely outcome of such fiscal retrenchment would be a slump in countries with large external and fiscal deficits.

Take a look at the average fiscal deficits of 12 significant (or at least revealing) eurozone members from 1999 to 2007, inclusive.

The supply of cheap funding has created useful demand by commercial banks for government bonds, just as fiscal deficits are rising.

By far the best predictor of subsequent difficulties were the pre-crisis external deficits, not the fiscal deficits (see charts).

Fiscal deficits have been allowed to rise and interest rates to fall to stimulate aggregate demand.

In contrast, eurozone members face years of austerity to reduce large fiscal deficits.

Exploding fiscal deficits are mainly the result of collapses in activity and revenue rather than of bank bail-outs.

In the UK at least, the fiscal deficits are mirror images of private sector surpluses.

This is not surprising: today's fiscal deficits exceed those of any previous period, in peacetime.

In developed countries today, fiscal deficits are surely a consequence of post-crisis private retrenchment, not the other way round.

The private sectors of the US, UK and Ireland are now providing nearly all the savings needed to cover their huge domestic fiscal deficits.

The result is not just huge fiscal deficits, now that private- sector spending has collapsed, but a need to regain lost competitiveness.

It is not so much fiscal deficits as an inability to grow out of them that is worrying.

In an era when the most developed economies are running record fiscal deficits, it is reasonable to look for new global economic leadership.

Unprecedented monetary easing and fiscal deficits will, sooner rather than later, need to be withdrawn and reduced.

And "outsize fiscal deficits" suggest that fiscal stimulus may also be exhausted.

There were alternative strategies that would have almost surely produced more growth with smaller trade and fiscal deficits.

Investec is keeping its "low conviction" equity overweight due to concerns over huge fiscal deficits despite upside potential.

Government bonds were steady, if you picked a country with no trade or fiscal deficits and a high savings rate.

Depending heavily on massive monetary expansion and fiscal deficits in erstwhile high-spending countries will ultimately be unsustainable.

Many people want America's government to rein in its fiscal deficits and are upset by the fact that government bond yields remain low.

The fiscal deficits of many industrialised countries have expanded to levels unseen before, except in times of war.

The frailties in the US symbolized by yawning fiscal deficits have yet to be seriously addressed.

With the exception of Japan, the fiscal deficits will also be bigger in the deficit countries.

The budget the president unveiled last week would raise spending and fiscal deficits to record levels.

If fiscal deficits are to disappear, households and companies have to spend more. Policy must help to achieve this.

at some stage, debt dynamics become unsustainable, markets react and fiscal deficits become counterproductive.

The US should take the initiative to adjust its policies, raise its savings ratio appropriately and reduce its trade and fiscal deficits.

This private frugality has caused the fiscal deficits, they insist, not the other way round.

Unless entitlement systems are reformed (by reducing benefits) or tax bases broadened, fiscal deficits will rise still further.

China complains about incompetent US financial regulation, vast fiscal deficits and the Federal Reserve's quantitative easing.

As such, these hidden banking losses are actually quasi-fiscal deficits, rather than traditional non-performing loans.

A consensus is forming that policymakers should tighten fiscal policy, sharply, in countries with large fiscal deficits.

Safeguards were set: it was agreed national fiscal deficits should not exceed 3 per cent of gross domestic product.

Jobs disappear in both grasshopper colonies and ant nests and fiscal deficits soar, especially in grasshopper colonies.

Yet it is quite clear that an isolated discussion of the need to reduce fiscal deficits will not work.

Jumps in fiscal deficits are the mirror image of retrenchment by battered private sectors.

When, in 1997, the Hashimoto government tried to reduce the fiscal deficits, the economy collapsed and actual fiscal deficits rose.

Finally, America is on the verge of a major step towards reducing its dangerous and long-term fiscal deficits.

As Smithers & Co points out, most countries running fiscal deficits are unlikely to become surplus trading nations any time soon.

But those increases would probably be much smaller than those generated by a decade of huge fiscal deficits.

So private sector spending surges anew, fiscal deficits shrink and the economy appears to being going back to normal, at last.

For 20 years, Japan has been able to recycle savings to pay for its fiscal deficits.

Government finances suffered, with fiscal deficits soaring across Europe and North America.

The academic evidence on Keynesian growth effects of fiscal deficits is thoroughly inconclusive.

Fiscal deficits are swelling across the western world.

The euro area has three big problems, not just one: its fiscal deficits, bank liabilities and structural barriers to growth.

Increasingly it is clear that unless such reduction in fiscal deficits occurs, the incentive to continue monetizing them will increase.

Imagine that weaker eurozone countries were forced to contract their fiscal deficits sharply.

Fiscal deficits are expected to more than triple in some countries and force governments to work with smaller budgets.

Japan has run continuous fiscal deficits and seen its debt downgraded by the ratings agencies.

Attempts to curb fiscal deficits when the private sector is cutting back sharply are likely to fail even in their own terms.

Huge fiscal deficits are a symptom of the crisis, not a cause.

These countries will duly run fiscal deficits that are bigger than their private surpluses.

I assume that, after the midterm elections, resurgent Republicans will offer new tax cuts and ignore the fiscal deficits.

Sustained fiscal deficits could eventually put the rating in question.

It will also have lower fiscal deficits until 2014 and a lower primary fiscal deficit (before interest payments) until 2013.

Yet he is surely right that the buffers have mostly gone: interest rates are low, fiscal deficits are huge and the is eurozone stressed.

But several have unsustainable fiscal deficits and rapidly rising debt ratios (see chart).

At their summit last month, one developed country after another, bar the US, said they would cut fiscal deficits.

Yet Asia's governments are heading in the opposite direction, running sizeable fiscal deficits.

Reducing fiscal deficits and high debt ratios and returning to more normal monetary policies in the advanced countries is more important.

What of the need for governments to start dealing with fiscal deficits and runaway debt?

Maybe, the collapse in private spending in the wake of the financial crisis was caused by terror of the fiscal deficits to come.

If, in reverse, fiscal deficits are to fall, the private sector must spend more relative to income or the current account must improve.

The huge private surplus has, in turn, been absorbed in capital outflows and ongoing fiscal deficits.

It is also that the current combination of high asset prices, low interest rates and massive fiscal deficits is unsustainable.

High fiscal deficits in Europe, in combination with rising interest rates, could lead to tax and wage pressures.

In fact investors have been remarkably tolerant of fiscal deficits in recent years.

The huge increases in fiscal deficits were appropriate to the circumstances.

Greece elected Socialist governments during the 1980s which ran fiscal deficits even larger than today's.

Smaller fiscal deficits in the developed world mean more savings can flow east and south: a good thing.

Such expectations may rise if investors worry that central banks will print money to finance governments' rising fiscal deficits.

Yet such thrift entails either current account surpluses or fiscal deficits.

For the external deficit countries, the concern is how to lower fiscal deficits without tipping their economies back into recession.

In a world of bad choices, huge fiscal deficits may be less damaging than the monetary ease.

Remember, 85 per cent of American people have health insurance and there is genuine public concern about rising fiscal deficits.

But the likely longevity and scale of the needed fiscal deficits are quite scary.

At present, therefore, fiscal deficits are not crowding the private sector out.

France and Italy have struggled harder, and are hampered by large fiscal deficits of their own.

In all, however, fiscal deficits were useless as indicators of looming crises (see charts).

Such deleveraging almost certainly means a longer period of large fiscal deficits than almost anybody now imagines.

So it is hardly surprising to hear more and more voices question the wisdom of rushing to cut fiscal deficits.

So a big reduction in these fiscal deficits probably demands an offsetting reduction in business sector' financial surpluses.

and, finally, they believe fiscal deficits fail to support demand.

This is leading to a huge expansion in fiscal deficits and pressure for easier monetary policies from the ECB.

Nobody thinks the markets would tolerate huge fiscal deficits, so instead the government is cutting spending and raising taxes.

If that happened, plans to cut fiscal deficits in the longer term should also work.

US fiscal deficits would then soar and long-term US interest rates might jump.

Fortunately, countries with their own central banks can finance fiscal deficits directly.

It is also to focus as much on debt levels as on annual fiscal deficits.

And even if growth stays weak, today's fiscal deficits imply a pace of debt accumulation that will eventually lead to default.

But how quickly to cut fiscal deficits is a different matter.

Judging by fiscal deficits alone, it is America and Britain that should fret.

But even $1. 2 trillion of new U. S. consumer demand for Treasurys still wouldn't fill the hole created by burgeoning fiscal deficits.

They are also a boon to governments with yawning fiscal deficits.

Even the US cannot run fiscal deficits of 10 per cent of GDP indefinitely.

Unlike emerging economies, they can therefore slash interest rates and increase fiscal deficits.

On the other are these huge fiscal deficits.

What needs to be done now is to design a long-term plan to reduce fiscal deficits in the future.

Over the past years, fiscal deficits widened to about 2 per cent of GDP.

One might imagine, for example, that advanced countries eliminated their fiscal deficits but maintained these private surpluses.

That is why we speak of the twin deficit problem: fiscal deficits normally lead to trade deficits.

This is why the G-20 exempted Japan from the necessity to reduce its fiscal deficits.

This is particularly true if we are to escape from the huge fiscal deficits being run by many governments.

There is something to this idea, because the dollar has struggled and many expect it to have a rough go amid soaring fiscal deficits.

This is that running huge fiscal deficits for years is indeed possible.

The US will not meet this obligation amid fiscal deficits projected to exceed $5, 000bn over ten years.

His central ideas are: combining emergency aid for countries running excessive fiscal deficits with fierce penalties;

It rested on three central assumptions: first, treaty-defined limits would constrain fiscal deficits of members;

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