Fiscal Policy Choices in Uncertain Times, September 16, 2010, Douglas W. Elmendorf, Director

• “CBO expects that the economic recovery will proceed at a modest pace, leaving the unemployment rate above 8 percent until 2012.
• There are monetary and fiscal policy options that, if applied at a sufficient scale, would increase output and employment during the next few years (but not overnight).
• Such options would have costs as well. Expansionary fiscal policy would increase federal budget deficits and debt relative to current baseline projections. Policymakers need to address those trade-offs.”
• Related postings on financial system