Committee for a Responsible Federal Budget

New Members of The Announcement Effect Club

Jun 13, 2011 | Economics

Over the past few weeks, a number of new members have been added to The Announcement Effect Club. Recently, Washington Post blogger Ezra Klein, Senator Joseph Lieberman (I-CT), and Rep. Steny Hoyer (D-MD) all joined the club. All pointed out that enacting a fiscal plan now to reduce our long-term fiscal problems would restore confidence in the market and thus bring about short-term economic benefits in addition to the long-term benefits often associated with deficit reduction.

Ezra Klein, in a Bloomberg op-ed on 6/8/11, said:

"...agreeing to deficit reduction later would also help make a stimulus more effective now. It would calm fears about federal spending, demonstrate that the government can overcome political paralysis and encourage businesses to take advantage of short-term tax incentives by confirming that Washington won’t be handing out more goodies once recovery takes hold."

Following that, Sen. Lieberman, in a Washington Post Op-Ed on 6/9/11 about reforming Medicare and reducing deficits, noted that:

"Doing so would send a powerful and necessary signal to financial markets that we are addressing our long-term fiscal challenges. It would prove to our constituents that we can still come together to fix a program that they want and need. In fact, showing that we can work across party lines to solve one of our toughest fiscal problems is probably the best thing we can do to stimulate confidence in our economy, and that will lead to more capital investment and more jobs."

Finally, Rep. Steny Hoyer, in an interview with CBS alongside Rep. Paul Ryan on 6/12/11, when talking about the national deficit and fiscal plans such as the House passed FY 2012 budget, noted that:

"If we can work together, I think that’s going to raise the confidence level here and around the world, and I think that in itself will have a very positive effect."

These three new members of the club all agree that a fiscal plan, or at least major deficit reduction, is both necessary and a way to help stimulate the economy.

Welcome to the club, and let us hope that lawmakers enact a fiscal plan sooner rather than later.