Thursday, January 27, 2011

US faces “daunting economic and budgetary challenges” ahead:

CBO Director explains what a debt crisis would look like

Posted by therightscoop on Jan 27, 2011

He said the longer the nation waits to reduce budget deficits the larger the changes will need to be — and the more “disruptive” these changes will be for the economy. …

But Elmendorf has said that under a plausible scenario, the U.S.’s cumulative deficits over the next decade could hit $12 trillion — not $6 trillion.

In his testimony, Elmendorf said policymakers face a “difficult tradeoff” between implementing deficit reduction during a time when the economy is still struggling to gain strength versus delaying deficit cuts until the future when more far more draconian changes are needed. …Read More