Columbia International Affairs Online: Working Papers

CIAO DATE: 05/2011

Webinar: Lower the floor or raise the ceiling? US fiscal and economic outlook

Leo Abruzzese

April 2011

Economist Intelligence Unit


Key Points

• A serious deficit-reduction debate is underway
Despite wide policy differences, this is encouraging and long overdue
• Agreement on some basic steps may happen soon
A serious, long-term deal won't happen until after the election
• A credible plan will require revenue increases
These won't come quickly or easily, but they are unavoidable
• The debt ceiling will be raised, amidst much drama
The US will not default on its debt
• The US economy is still recovering...but higher energy and food prices are creating headwinds