Some Fiscal Advice for the New Government: Don't Let the Sun Go Down on BEA

In mid-February, President Clinton will outline his administration’s first, and much anticipated, economic plan. Although the exact nature of the package is still speculative as of this writing, it is clear that any short-run stimulus will be accompanied by long-run deficit reduction measures. For this, the administration is being praised in advance, not the least by financial markets, which have responded with a nearly 40-basis-point decline in long rates since the election. But whether the markets — and by inference the American public — stay on board depends on the administration’s ability to follow through with a clear and credible long-term plan to accomplish the deficit reduction it and the new Congress clearly desire.