The right way to deal with a budget problem that was years in the making is by formulating a credible plan to reduce the deficit over time and as the economy is able to withstand the necessary fiscal belt-tightening. That is what President Obama is doing.
You cannot reform a tax system without some pain and without someone getting hurt.
There is some talk of lowering (the income tax), and they will have to. People are not making enough to pay it.
If you look at the Greek economic record, it's been very similar to the U.S. experience in the first four years of the Great Depression. And after having a Depression-sized event, they've cut the unit-labor cost in Greece - they've closed something like half the gap with Germany.
Gradual fiscal consolidation may also be stimulative in the short run.
Where fiscal space is low, fiscal policy needs to adjust in a growth-friendly manner to ensure public debt is on a sustainable path, while protecting the most vulnerable.
Greece's unprecedented fiscal effort, which was more than planned, has triggered much larger contractions of economic activity and the tax base than the original program had assumed.
When you have a country that's been accustomed to government spending at a certain level, it is really hard to ratchet it back.
We all know spending levels for defense and other urgent priorities have been woefully inadequate for years. But we haven't found the will to work together to adjust them.
People understand that you have to do difficult things to sort out our own public finances.
Look, the, the - this country has not lived within its means for a very long time, and, and the truth is we're going to have to take our medicine.
What will growth policy have to look like in a fiscally compacted Europe? Clearly any illusion of budget stimulated growth policy will have to go away.
We must ensure that more binding, durable, and enforceable fiscal rules go hand-in-hand with funding certainty for countries pursuing sound and sustainable economic policies. We need to keep pushing forward towards a comprehensive solution to the challenges of the eurozone.
