Deficits must be cut, yes, but the rush to austerity risks undermining the fragile global recovery.
Sentiment: NEGATIVE
It certainly would be helpful going forward for deficit reduction efforts to focus on the medium term while not subtracting from the impetus we need to keep a fragile economy moving forward.
The deficit crisis is real and must be addressed. But it cannot be solved on the backs of the weak and vulnerable.
Well, I think what we need to remember is that budget deficits can impede economic activity.
Instead of an end to austerity, Labour has made clear that it wants to impose more austerity cuts.
If the program goes off track again due to recession, this should not become a pretext for the imposition of more austerity measures.
But the debt limit obviously is something that needs to and will be passed. That is not inconsistent with a process and a belief that we have to get significant deficit reduction.
I think where I differ a little bit, we absolutely have to think about the deficit looking down the road. And certainly that's something the president has said that we need to, as the economy recovers, have a plan in place for getting it down.
Traditionally, the way deficits have been cut is you hold expenditures more or less constant in real dollars and then let growth come in to fill it up.
The three main political parties all agree the UK deficit is high and needs to be brought down. All agree that it is easier to get a deficit down if you have faster growth, cutting unemployment-related costs and raising revenues.
The more we can do to address fiscal austerity, the better our markets will do, and there is a real political shift to doing that.