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NABE Panel: Job Growth, Deficits and Terrorism Remain Biggest Challenges;
Free Trade Not a Problem
March 2004
“The major economic risk has now moved to job growth and the deficit rather than terrorism, according to the latest canvass of NABE members on policy issues,” says Duncan Meldrum, President of NABE and Chief Economist, Air Products and Chemicals, Inc. “In the longer run, the deficit is joined on the list of worries by the rising elderly population, health care, and education.”
Survey Highlights
Jobs and federal deficits are the biggest problems facing the U.S. economy this year. Each of these was picked by 25% of respondents, with 19% stating terrorism was the chief worry.
In the longer run, the rising elderly population and related health care costs are the primary problems. The rising elderly population and the concomitant rise in the dependency ratio were the prime long-term worries for 27% of panelists, while 19% focused on health care costs. The federal deficit was chosen by 24%.
Technology and flexibility are our greatest strengths. Forty-five percent of NABE respondents felt the strong U.S. technological lead is our biggest strength, while 24% said it was the flexibility of the economy and the labor force.
Monetary policy is just right. Nearly three-quarters of respondents said current monetary policy is about right, but were evenly divided about future policy, with 48% believing rates should remain flat over the next six months and 47% saying interest rates should rise.
Fiscal policy is too loose. Nearly two-thirds of respondents thought current fiscal policy is too loose, and 77% thought it should become more restrictive going forward. Only 40% thought it would become more restrictive, however.
Free trade is not a problem for jobs. Over 60% of respondents thought that free trade is having no impact on jobs, while another 31% said it was, but only a little. Only 9% thought free trade was having a significant impact.
The current account deficit will become a bigger problem. Over half
of the respondents stated that the current account deficit—which
measures trade and financials flows—is not a problem yet, but would
become one, while the rest of the respondents were divided between those
who thought the deficit would never be a problem and those who thought
it already was a problem. The most popular cure is to promote overseas
growth, with stimulation of direct investment and reforming the U.S.
tax system tied for second. Almost all oppose tariffs or export subsidies.
National Association for Business Economics
1233 20th Street NW #505
Washington, DC 20036
Phone 202.463.6223 Fax 202.463.6239
nabe@nabe.com
© 2003-2004, NABE®
The NABE Economic Policy Survey presents the consensus of a panel of 203 members of the National Association for Business Economics. Conducted semiannually, this survey was taken March 1-5, 2004. May be reprinted in whole or in part with credit given to NABE. View the survey results, including complete tabulations, online at www.nabe.com. This is one of three surveys conducted by NABE. The other two are the NABE Outlook and the NABE Industry Survey. David Wyss of Standard & Poor's and Laurie Matthias King of Capital Guardian Trust Company conducted the analysis for this report.
PDF Version (better for printing)
Answer tabulations (PDF)
Graphs (Flash 68 K)
