U.S. Macro Outlook: Compromise Boosts Stimulus
The Obama administration and congressional Republicans have agreed to a wide range of tax cuts and benefit extensions.
The proposals will boost growth in 2011, likely ensuring enough new jobs to measurably reduce unemployment by this time next year.
Of the package's provisions, extending unemployment insurance benefits provides the biggest economic bang for the buck.
The plan to continue current marginal tax rates at all income levels is prudent, given the current economic environment.
The deal lessens pressure on the Federal Reserve to engage in additional quantitative easing.
The federal deficit will grow this year and next, but debt markets should take this in stride as the recovery accelerates.