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Deficits hurt U.S. gov't's ability to respond to future crisis: Fed official

Xinhua,February 24, 2018 Adjust font size:

WASHINGTON, Feb. 23 (Xinhua) -- Ballooning deficits may undermine the government's ability to respond to future recessions with fiscal policies, a top U.S. Federal Reserve official said on Friday.

"Large deficits now may make future actions difficult" for the government, Boston Fed President Eric Rosengren said to a conference of central bankers and economists.

He added it was difficult to depend on fiscal policies in the face of a recession given political pressures and uncertainties.

The national debt held by the public has nearly tripled over the past decade to about 15 trillion dollars today. Trump administration's economic policies, including tax cut and spending hike, will further deteriorate America's fiscal prospect.

The nonpartisan Committee for a Responsible Federal Budget projects that the annual budget deficits will balloon to over 1.2 trillion dollars in 2019. Economists worry that rising deficits will leave the U.S. government less room in the future to respond to a financial or economic crisis.

Former Fed Chairwoman Janet Yellen also raised concerns about deficits at her final press conference in last December. "I am personally concerned about the U.S. debt situation. Taking what is already a significant problem and making it worse, it is a concern to me," she said. Enditem

 

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