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Economic Research

Meeting the U.S. Financing Needs

Bank rescue via TARP funds, the bailout of the GSEs and two fiscal stimulus packages have put severe pressure on the U.S. fiscal deficit since 2008. Despite having little bang for the buck in the short-term, the recently passed $787 bn fiscal stimulus package will have a bill of $185 bn in FY2009 and $399 bn in FY2010 (based on Congressional Budget Office estimates), adding to the U.S. governments financing needs. Given further downside risks to growth and bank losses, another stimulus package and more funds for bank recapitalization will be required during 2009-10. After a deficit of[...]

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