Another View On the Deficits
So you think the "twin" budget and trade deficits might trigger a quick crisis-even another stock market crash-and lead to another recession sometime soon.</br></br>Don't bet on it, say a trio of knowledgeable Brookings Institution economists. Although they have their own fears about the dangers of the deficits, they say that chances are that the United States can-and probably will-carry the burden of them for a long time, with relatively little pain.</br></br>"The problem," says Brookings research director Charles A. Schultze, "is not that the wolf is at the door. It's more like termites in the woodwork."</br></br>To be sure, not everybody buys the Brookings thesis. Says former Carter Treasury official and director of the Institute for International Economics C. Fred Bergsten, "It's a fantasy to think that Bush can skate through the next four years without a hard landing-that could mean not only a collapse of the dollar, but a serious inflation and a recession."</br></br>And in persuasive testimony this week before the National Economic Commission that hoisted a warning signal to President-elect George Bush, Federal Reserve Board Chairman Alan Greenspan also saw danger on a much more immediate horizon.