Cresset's Jack Ablin Says U.S. Deficit to GDP Is Concerning

The video discusses the implications of deficit to GDP ratios, highlighting concerns about the current economic situation. It compares the debt to GDP ratio to historical figures, such as during President Reagan's era, and examines the short-term focus of policymakers. The discussion also covers market psychology, the role of bond investors, and the impact of quantitative easing by central banks like the Federal Reserve, European Central Bank, and Bank of Japan.

Why is a smaller deficit expected when the economy is performing well?

• Because it increases unemployment rates.

• Because it indicates a healthy economy.

• Because it allows for more government spending.

• Because it reduces the need for foreign investment.

What is a major concern regarding the current debt to GDP ratio?

• It is double what it was under President Reagan.

• It is lower than during President Reagan's era.

• It is decreasing rapidly.

• It is not a concern for policymakers.

How do policymakers typically approach debt issues?

• By reducing government spending.

• By focusing on immediate concerns.

• With a long-term perspective.

• By consulting with international bodies.

What role do bond investors play in the market's reaction to debt concerns?

• They are unaffected by debt levels.

• They have no influence.

• They can cause market instability.

• They stabilize the market.

What impact did the Federal Reserve's quantitative easing have on financial markets?

• It decreased market liquidity.

• It had no impact.

• It increased the amount of money in the markets.

• It led to higher interest rates.