Dr. Gregory Mankiw Kat, from Michigan writes: Dr. Gregory Mankiw The quarter that just ended looked very strong (July to September). Most private forecasters are estimating that growth was over four percent at an annual rate. This should be enough to bring the labor market back to life. We started to see some good news in the recent employment report.
One interesting indicator in the employment report is that temporary help employment has been growing strongly. Temporary help employment has been a strong predictor of future employment growth, as firms add to their temporary workers first and then turn to permanent workers. I therefore expect the labor market to improve going forward.
Scott, from Washington DC
writes: My question is this: Do you feel that the recession is over, and perhaps more importantly, has the President's economic plan began to catch wind? Dr. Gregory Mankiw As I noted in my answer to the previous question, things are starting to look better in the economy. One of the big reasons is the President's Jobs and Growth tax relief package, which went into effect this summer. This put money in people's pockets, stimulating consumer spending. In addition, a variety of tax reforms lowered the cost of capital, stimulating investment spending. Both of these lead to more rapid growth in real GDP and to stronger job creation.
We are starting to see the effects and will see them more fully over the next year.
Justin, from Anderson, SC
writes: Dr. Gregory Mankiw Regarding your first question, the President has put forward a six point plan to further strengthen the economy. It includes streamlining regulations, making healthcare costs more affordable and predictable, reducing the burden of frivolous lawsuits, ensuring a reliable energy supply, opening up markets around the world, and enabling families and businesses to plan for the future with confidence by making the tax cuts permanent. On your second regarding Social Security, you are right that Social Security will need to be strengthened to make sure it is sustainable for future generations. The President has often spoken of the importance of personal accounts in Social Security as a key element of reform. The President's Budget from February of this year called the unfunded liabilities of the current entitlement programs "the real fiscal danger." This is absolutely correct. These are vital programs for Americans -- the key is to make sure they have a strong foundation and are available for future generations. Tres, from Gainesville,Fl writes: Dr. Gregory Mankiw
My day as Chairman of the CEA starts with a 7:30am staff meeting at the White House and continues for a full day of meetings with everyone from CEA interns to the President and his senior advisers. The Council is involved in discussion of many facets of economic policy, both domestic and international. If you want to know more about what the Council does, take a look at the annual Economic Report of the President, published every February.
Justin, from Argillite, Ky
writes: Dr. Gregory Mankiw The primary reason we have a deficit today is that the economy slowed substantially beginning in 2000 and through 2001. This accounts for about half of the deterioration of the fiscal outlook from January 2001 to today. About one-quarter of the change is due to increased spending, primarily on defense and homeland security. The remaining one-quarter is attributable to tax cuts.
When evaluating budget deficits, one has to set priorities. The President has made clear that has first priority is having an economy that is creating jobs for Americans. Reducing the budget deficit is a priority as well, but it is not the only priority.
Marv, from Grand Strand
writes: Marv Dr. Gregory Mankiw brian, from L.A. writes: Dr. Gregory Mankiw Stephen, from Newberry, FL
writes: Can you note some recent successes (or point out some shortfalls) in our use of economic measures to further our international objectives? Thanks Dr. Gregory Mankiw We work very closely with the National Economic Council, which coordinates the economic policy process. To put it simply, they run the process, while we contribute with analysis.
On international economic issues, one of the most important of the President's initiatives is to promote free trade around the world. This is accomplished through both multilateral and bilateral negotiations with our trading partners. This keeps U.S. Trade Representative Bob Zoellick busy -- he is tirelessly working to open markets.
Dr. Gregory Mankiw
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