A rift has emerged in the Canadian economic community, with Bay Street economists calling
for fiscal stimulus from the federal government while academic economists are openly hostile to the idea.
The odds of the Fed going faster than that are somewhat higher than the odds they go slower, because of the
potential for fiscal stimulus to provide a boost to an already healthy economy.
Moreover,
money for fiscal stimulus may translate into net Treasury issuance this year of US$ 1.3 trillion at a time when the Fed itself is no longer a buyer.
Proposals for fiscal stimulus via tax cuts, government spending and regulatory reform have led to expectations of stronger economic growth, higher inflation and higher interest rates.
Hope for fiscal stimulus in the U.S., higher earnings - per - share growth, and the return of more normative levels of inflation could buoy sentiment during the first quarter of 2017.
That's a tough sell at a time when public opinion has tilted sharply against cutting taxes on the rich, and when a low unemployment rate and Federal Reserve interest rate increases have eliminated the
case for fiscal stimulus.
President Draghi made certain to present headwinds pertinent to the ECB: Fear of rising tariffs; the inability of European governments to devise a plan for unified risk sharing; and, of course, the continued failure of the EU to embark on a
plan for fiscal stimulus.
Prime Minister David Cameron has insisted there is no
room for fiscal stimulus through tax cuts or spending increases, and the only solution is to «get on top of your debt».
As Chinese labor market indicators are positive, there is no
need for another fiscal stimulus; and they will wait till after the National Congress for any decision on this powerful tool.
The SLF, a left - of - centre pressure group, had first attempted to table a motion for the conference
calling for a fiscal stimulus a month ago, but was rebuffed by the federal conference committee on the grounds that it would require a two - hour debate.