Tax increases appear to have a very large sustained and highly significant negative impact on output.
Our estimates suggest that a tax increase of 1 percent of GDP reduces output over the next three years by nearly 3 percent. The effect is highly significant.
We're committed to working with Congress to doing what the president said he was always going to do, which is cut the deficit in half over the - over his first term.
If you look at the studies coming out of the Congressional Budget Office, the number one thing that's going to blow a hole in the deficit as we go forward 20, 30 years is government spending on healthcare.
The goal of long-run economic growth without asset price bubbles is not only achievable, but is something we should expect if we put a sound regulatory framework in place and if policymakers remain vigilant.
I think where I differ a little bit, we absolutely have to think about the deficit looking down the road. And certainly that's something the president has said that we need to, as the economy recovers, have a plan in place for getting it down.
Where we're coming down is we currently have $787 billion of stimulus that's been passed. We're certainly focusing on spending that money as quickly and as efficiently and as transparently as we can. We think that's absolutely the right strategy.
You know, I think the, the crucial thing, you know, we have put in place what is, is just simply the biggest, boldest recovery package in history, right; the stimulus package, biggest ever; the financial rescue, absolutely comprehensive; a housing plan - that is incredible medicine for the economy. And we fully expect it to work.
What we're going to do is redouble our efforts on financial regulatory reform, because that has in it sensible things like say on pay, so at least the shareholders are minding the store, sensible things like saying, for heaven's sakes, compensation should be focused on - on long term, so that you don't have rewards for short-term risk-taking.