Fiscal Commission Joins the Announcement Effect Club!
In today's release of the Fiscal Commission's final recommendations, the report undoubtedly, unequivocally, indubitably joined the Announcement Effect Club. In the section on how the plan can fit into "fostering an economic recovery", here's what they had to say:
"Put in place a credible plan to stabilize the debt. A number of economists have argued that putting into place a credible plan to reduce future deficits can have a positive effect on the economy. This so-called “announcement effect” could help to prevent interest rate increases and also mitigate uncertainty among individuals and businesses. In addition, stabilizing the debt will improve the country’s long-term growth prospects by reducing the “crowd out” of private investment and by forestalling a potential fiscal crisis."
They even used the phrase "announcement effect"!
Of course, co-chairman Erskine Bowles of the Fiscal Commission was was already a card carrying member of the club from remarks he made during a June meeting of the Commission. But we welcome into the club all other members of the Commission who sign on to the plan as well.