Fiscal policy is blamed for slowing the economy

The Fed and the Gov are at it again. The two butt heads admit policy regarding the sequester. The Federal Reserve cautions that tax increases coupled with spending cuts are restraining economic growth. Joel Naroff, chief economist at Naroff Economic Advisors, said he viewed the Fed’s more forceful remarks on the issue as criticism of Congress’ fiscal policies. “The Fed noted that the private economy is pushing ahead, but it is the government that is putting roadblocks in the way,” Naroff said. “That was as clear a shot at Congress as I have seen the Fed take.” As Naroff notes, since the recession the economy has been growing positively. Equity has been up and companies continue to generate signifigant revenue. However, with constant impending fiscal policy companies and investers are hesitant to spend when they are unsure of the fiscal future and how it will affect their business and spending. This is stagnating national economy in a time when it is prime to prosper.

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One Response to Fiscal policy is blamed for slowing the economy

  1. Nicky Tynan says:

    Thanks for this post. So many economists are arguing with the Fed against too much austerity. Bernanke must be thinking that it is a return to the post-Depression world but with the Fed and Congress roles reversed.

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