Editor’s Note: the transcript excerpt below is from the Wall Street Journal’s video series America: A Portfolio of Ideas. In the video, Brookings Senior Fellow William Gale discusses fiscal policy and the changes needed to manage the deficit and recovery.
“We are in an era in terms of economic and policy uncertainty, where the level of uncertainty about the evolution of the economy, about the evolution of policy, is higher than it has been in the past….
“The economy needs more stimulus now than is being talked about, the economy needs more budget control in the medium-term than is being talked. If you do both at the same time, short-term stimulus and medium-term budget control, you make each of them stronger….
“Anyone whose activities depend on government policy, it seems very difficult for them to look ahead without any certainty about what’s going on. So the sooner the White House and the Congress or the Fiscal Commission can come up with a plan that says, ‘Here’s this fiscal gap, here’s how we’re going to solve it,’ the better not only because we’ll attack the issue sooner but because the business sector will be able to respond knowing what the government’s going to do instead of spending all their time wondering what the government is going to do.”