Economists ready to hike GDP view after tax deal

[OlympicBrian]

Source: MarketWatch

By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Wall Street economists were tapping into their spreadsheets Tuesday, ready to ratchet up their economic growth forecasts for next year in light of the tax deal struck by President Barack Obama and congressional Republicans, particularly the surprise one-year reduction in payroll taxes.
...
The flip side of the tax-cut boost is the likely deterioration to the government’s already-strained finances to the tune of $1 trillion over two years.

Economists at BNP Paribas say the ratio of deficit-to-GDP will grow to 9.5% in fiscal 2011 from their previous 8.5% forecast, and it will rocket to 9.8% from the prior 6.9% estimate for fiscal 2012.

Added Dan Greenhaus, chief economic strategist at Miller Tabak: “Adding nearly $1 trillion to the debt over just the next two years, without a concurrent plan to reduce the debt in the medium term is in many respects the height of irresponsibility.”



Read more: http://www.marketwatch.com/story/economists-ready-to-ratchet-up-gdp-forecasts-2010-12-07

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Moody's already warned about danger to the US credit rating for just the extension of the Bush tax cuts. This tax deal is even less responsible.

Moody's warns, "extending the Bush tax cuts would be bad for the US credit rating."
http://www.marketwatch.com/story/treasurys-pare-losses-after-data-2010-11-15?dist=afterbell

[Ghost Dog]

1. Zerohedge comments:

Here Comes Moody's: "We Have Long-Term Concerns About The US Rating Outlook And They're Not Being Addressed"

But being the spineless paragon of worthlessness, Moody's adds that it "doesn't see any change in US ratings in next 18 months to 2 years." That the market jumps on this news is merely yet more confirmation that this toxic piece of garbage company has to be put out to pasture already (not even its former master and current hypocrite extraordinaire Warren Buffet is a fan anymore) - the only rating agency that matters is Dagong, which is expected to downgrade the US to junk in the next 3 months.

/... http://www.zerohedge.com/article/here-comes-moodys-we-have-long-term-concerns-about-us-rating-outlook-and-theyre-not-being-ad

[Demoiselle]

2. And where was Moody's during all that credit default swap unpleasantness?

[Demeter]

4. Raking it in with both hands

Who do you think was issuing all those AAA ratings on CDOs CDS, MBS, etc?

[OlympicBrian]

3. Well personally I hope every Democrat lines up against the President to block the package nt