Word: deficits
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Dates: during 1980-1989
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...program trading, which was blamed by some experts for accelerating the Oct. 19 slide, was permitted to resume early last week. That prompted nervous traders to send the Dow Jones average falling a sharp 58.85 points on Monday. The Dow rocketed back 61.01 on Thursday, fueled by the trade-deficit improvement. The market got more good news on Friday when the Government said that wholesale prices during October fell .2%, which means that the Federal Reserve can stimulate the economy with less fear of rekindling inflation. Despite that promising sign, the Dow fell, dropping 25.20 points Friday...
Wall Street and just about everyone else was exhorting Washington last week to get moving on the budget deficit. Declared West Germany's Finance Minister, Gerhard Stoltenberg: "The center is Washington. That's where the difficulties are coming from." In the U.S., a group of more than 150 business leaders, lawyers, educators and former Cabinet members, calling themselves the Bipartisan Budget Appeal, took out a two-page advertisement in the New York Times and the Washington Post to demand spending cuts of at least $30 billion to $40 billion in fiscal 1988. Said the group, which included a range...
...spending reductions and revenue increases before Nov. 20, when $23 billion in arbitrary cuts will take hold under the Gramm-Rudman law. The committee began the week with optimism all around, based on a plan proposed by House Minority Leader Robert Michel of Illinois that would cut the deficit by $30 billion in fiscal 1988 and $45.5 billion in 1989. Michel's proposal was considered a breakthrough because it managed to elicit at least tentative support from the President, even though it contained the tax increases ($8 billion in 1988) that might satisfy congressional Democrats...
House and Senate Democrats then made their counterproposal, which called for a $28.5 billion deficit reduction in the first year and $58.4 billion the second. The biggest area of difference in the two proposals concerned taxes. The Republican proposal called for about $8 billion in new taxes the first year, while the Democrats wanted $12 billion. Other disputes were smaller, though numerous. In the defense budget, the Republicans proposed a $4.9 billion cut from the 1988 inflation-adjusted level, while Democrats called for slicing $5.4 billion. The priorities were reversed in domestic spending categories such as Medicare benefits and farm...
Most economists believe a deficit cut is necessary to prevent a loss of confidence that might bring on a recession. The contrary opinion among a few thinkers is that too large a budget reduction would sap momentum from the economy at a weak moment. But that idea seems increasingly implausible in the light of Washington's current paralysis. Says Economist Rudolph Penner of the Urban Institute: "The last thing that should keep you awake right now is the fear that Congress will do too much...