Fiscal fixes in forefront

Experts: Recoveryrests on right calls

From The Boston Herald
By Ira Kantor
January 22, 2013

President Obama started his second term yesterday with the U.S. economy in better shape than the shambles it became after the 2008 meltdown, but the nation still faces deep fiscal problems that could derail the recovery.

“It’s not do-or-die in the sense that we don’t have to solve the long-term problems right now, but we do need to keep making progress,” said Nigel Gault, chief U.S. economist for IHS Global Insight in Lexington. “What we absolutely can’t afford is making no decisions and hitting the debt ceiling. That would be absolutely disastrous.”

Despite avoiding the fiscal cliff, Obama and his congressional opponents will battle over deficit spending in the months ahead, when the economy is expected to grow only moderately. A key deadline is March 1 to prevent automatic budget cuts…

The president has more work to do on jobs. The unemployment rate stands at 7.8 percent, the same level as when Obama first took office in January 2009, although it improved from its peak of 10 percent later in his first term…

Laurence Kotlikoff, a Boston University economics professor, said leaders need to take “radical” action to rein in debt and tackle tax reform.

“We have to make sure we don’t go broke,” he said, “That’s going to improve the economy.”

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