Economist Greene Says Tax Plan Probably Won't Move GDP

The video discusses the potential impact of tax cuts on the US economy, highlighting that they are unlikely to significantly boost potential GDP growth without substantial investment incentives. Economists generally agree that the US does not currently need fiscal stimulus, although the Federal Reserve's actions may create a gap for the government to fill. The discussion also covers the implications for the deficit and debt, noting that the US benefits from holding the global reserve currency, which provides more economic leeway compared to other countries.

What is necessary to fundamentally boost potential GDP according to the discussion?

• Increased consumer spending

• Incentives for investment

• Higher interest rates

• More government regulations

Why might a fiscal stimulus be considered useful according to the Federal Reserve's perspective?

• To decrease inflation

• To fill the gap as the Fed pulls back accommodation

• To increase consumer debt

• To reduce government spending

What type of fiscal stimulus is suggested to be most beneficial?

• Demand-side stimulus

• Supply-side stimulus

• Monetary stimulus

• Consumer stimulus

What is a concern for deficit hawks regarding the tax cuts?

• They will decrease foreign investments

• They will lead to higher interest rates

• They will reduce the global reserve currency status

• They will significantly increase the deficit

What advantage does the US have that allows more leeway in managing its deficit?

• A higher inflation rate

• A smaller economy

• Holding the global reserve currency

• Lower tax rates