Conflicting Thoughts:: Most business economists believe the Federal Reserve’s controversial bond-buying stimulus program has helped boost the recovery but differ on the effects of the health care overhaul and other government initiatives, according to survey results released Monday. Nearly 70 percent of respondents in the semiannual survey of the National Association for Business Economics said the Fed’s program, known as quantitative easing, has been a success. A majority, 57 percent, described the central bank’s monetary policy as “about right”; 37 percent said it was “too stimulative.” There was less agreement on policy moves from the White House and Capitol Hill. About 39 percent of respondents said fiscal policy, which has included tax increases and automatic federal spending cuts, was “too restrictive,” while 21 percent thought it was “too stimulative” and 37 percent described it as “about right.” There also was disagreement on the effects of the Affordable Care Act, with 42 percent saying they thought it would have no significant effect on economic growth. Three in 10 respondents said it would reduce growth, and 18 percent said it would boost economic activity. The Congressional Budget Office recently said the health care reform law would enable some people to work less, reducing employment by the equivalent of 2 million full-time jobs over the next decade. “Respondents … generally agree about monetary policy, but there is no clear consensus about most fiscal issues,” said Jay Bryson, global economist at Wells Fargo Securities and chairman of the business economics group’s policy survey committee. The Fed began its third round of bond buying in September 2012, when the unemployment rate was 8.1 percent. The rate in January was 6.6 percent. With the unemployment rate dropping, Fed policymakers began tapering the $85 billion in monthly purchases, reducing them by $10 billion in December and January. But the economy has shown signs in recent weeks of slowing. Still, 70 percent of respondents said the Fed should continue reducing the monthly size of its bond purchases and end the program by the end of the year. About 58 percent expect that to happen. About 42 percent said they expected it to end in 2015 or later. Source: Jim Puzzanghera Tribune Newspaper Washington D.C.
Posted on: Thu, 06 Mar 2014 23:00:00 +0000
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