Economists Predict They’ll Be Disappointed

From a poll of economists:

Three-quarters said they would like to see the government cut spending over the next two years, while only 28 percent projected the reductions would actually take place.
The economists also favored increased regulation of financial markets, including greater oversight of derivatives, requirements on financial institutions to put more of their own funds at stake when securitizing mortgages and reform of the credit-rating companies.
This was the most surprising finding for Chris Varvares, the president of NABE and of Macroeconomic Advisers LLC in St. Louis.
“This tends to be a fairly conservative group, and you can see it except when it comes to regulation,” Varvares said in an interview. “They definitely are into more regulation in financial services.”

The survey also showed that 56% think the Fed will keep rates unchanged for the next six months. Nearly 80% think a second stimulus isn’t necessary.

Posted by on August 31st, 2009 at 8:32 am

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