Deficit Reduction Lower Priority for Economists

Washington, DC, Aug. 30, 2010--Business economists see more benefit in policies to promote economic growth than in policies to shrink the deficit.

The National Association of Business Economists said Monday that three-quarters of its members believe that promoting economic growth should be a higher priority than reducing the national deficit.

However, nearly the same number of NABE economists said they do not think another stimulus package is necessary to halt the economic slowdown and get the economy back on track.

The NABE survey showed that just under half of those polled see deflation as the main threat facing the economy in the short term but they were less certain about whether inflation or deflation is the biggest threat over the next three years.

There was little consensus among the NABE economists on when the central bank will raise interest rates and begin selling off assets it bought during the financial crisis.

Meanwhile, only 38% of economists surveyed believe the nation's current fiscal policy is "about right." But 64% supported recently enacted legislation that extends unemployment benefits up to two years.

One area where there was broad agreement in the survey was the question of tax cuts. A majority of economists said that none of the existing tax cuts on individual income, dividends and capital gains should be allowed to expire.