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The era of fiscal austerity is over: What big deficits mean for US economy

In the long run, the United States risks two grave problems

Neil Irwin | NYT 

The last seven weeks amount to a sea change in United States economic policy. The era of fiscal austerity is over, and the era of big deficits is back. The trillion dollar question is how it will affect the economy. In the short run, expect some of the strongest economic growth the country has experienced in years, and some subtle but real benefits from a higher supply of Treasury bonds in a world that is thirsty for them. In the medium run, there is now more risk of surging inflation and higher interest rates — fears that were behind a steep stock market sell-off in the last two ...

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First Published: Sun, February 11 2018. 00:58 IST