Source: Lloyd B. 1xbet online sports betting Jr., 785-532-4584, lbt@1xbet online sports betting edu
Related news: Bogus ratings of mortgage-related securities show conflicts of 1xbet online sports betting by credit rating agencies
News release prepared by: Beth Bohn, 785-532-1544, bbohn@1xbet online sports betting edu

Monday, Aug. 15, 2011

ECONOMIC STRANGLEHOLD: ECONOMIST SAYS BUDGET DEFICIT, WEAK 1xbet online sports betting , POLITICS MAKING IT HARD TO GET ECONOMY GOING

MANHATTAN -- A Kansas State University economist says the 1xbet online sports betting is running out of options when it comes to stimulating the weak economy and holding off a second double-dip recession since the 2007-2009 financial crisis.

&1xbet online sports betting ;The federal government normally has two tools to use in an effort to ameliorate a very weak economy: fiscal policy and monetary policy. Unfortunately, neither of these tools appear likely to resolve our situation,&1xbet online sports betting ; said Lloyd B. Thomas Jr., K-State professor of economics and the author of the book &1xbet online sports betting ;The Financial Crisis and Federal Reserve Policy,&1xbet online sports betting ; recently published by Palgrave Macmillan.

Thomas 1xbet online sports betting the economy has still not recovered from the severity of the 2007-2009 recession, and he added that the outlook for recovery isn't promising right now because of low consumption spending, investment spending and government purchases -- or aggregate spending, a main driver in economic activity.

&1xbet online sports betting ;Consumer spending is weak right now because household wealth has been hammered by the decline in home prices -- with one-third of households with mortgages now having negative equity in their homes; by the decline in the stock market and retirement accounts; by the decline in consumer confidence; and by very high unemployment,&1xbet online sports betting ; Thomas said.

Investment spending is weak since firms are reluctant to expand operations because people aren't buying their goods and services. New construction, also considered investment spending, is extremely weak, largely because of the glut of repossessed homes on the market. And government purchases are weak as state and local governments are forced to retrench because of the decline in their revenues, Thomas 1xbet online sports betting .

&1xbet online sports betting ;Spending by the federal government is inhibited by political considerations stemming from the huge federal budget deficit, which is largely the result of the enormous financial crisis that began in 2007,&1xbet online sports betting ; he said.

According to Thomas, conventional fiscal policy would involve large tax cuts and expansion of government expenditures to boost aggregate spending. However, fear that the United States could follow European countries into a sovereign debt crisis, coupled with political forces in Washington, have taken a needed additional fiscal stimulus off the table, he 1xbet online sports betting .

When it comes to monetary policy, Thomas 1xbet online sports betting the Federal Reserve has essentially exhausted its ammunition. The Fed announced Aug. 9 that it would continue to keep interest rates as low as possible.

&1xbet online sports betting ;The Fed has maintained its short-term interest rate near zero since December 2008, and has taken several measures to try to push the long-term interest rate as low as possible,&1xbet online sports betting ; Thomas said. &1xbet online sports betting ;Today, the 10-year Treasury bond yield is near 2 percent -- the lowest rate in 60 years. In short, the Fed is out of bullets.&1xbet online sports betting ;

Thomas 1xbet online sports betting the fear that we may be in for a lengthy period of economic stagnation, coupled with the gridlock in government, is driving the volatility in the stock market.

&1xbet online sports betting ;Investors are contemplating the possibility of a lengthy period of economic stagnation: slow or negative growth and very high unemployment,&1xbet online sports betting ; he said. &1xbet online sports betting ;Because both monetary and fiscal policy are essentially immobilized today, the economic outlook is precarious and indeed frightening.&1xbet online sports betting ;

1xbet online sports betting ' research interests include monetary economics, macroeconomic policy and international monetary economics. His work has appeared in leading journals, including The Economic Record, Business Economics, Southern Economic Journal, Journal of Economic Perspectives and more.