Has a Shrinking Deficit Hurt U.S. Economic Growth?

The video discusses the US economic situation, focusing on the deficit reduction and its impact on growth. It highlights the roles of fiscal and monetary policies, particularly the Fed's quantitative easing. The discussion also covers political dynamics, such as the potential Republican control of Congress, and their implications for markets. Historical examples, like the 1996 government shutdown, are used to illustrate potential outcomes. The video concludes with an optimistic view of market trends, especially in the third year of a presidential cycle.

What was the US deficit as a percentage of GDP before it was reduced to 2.8%?

• 10%

• 5%

• 20%

• 15%

What has been the primary role of the Fed's monetary policy in recent years?

• Increasing government spending

• Implementing quantitative easing

• Reducing taxes

• Cutting interest rates

What is the expectation if the Fed steps back from its monetary policy?

• Interest rates will rise

• Fiscal policy will take over

• The deficit will decrease

• The stock market will crash

How did the stock market react during the last government shutdown?

• It crashed

• It declined sharply

• It increased

• It remained stable

What tends to happen in the third year of a presidential cycle according to historical data?

• Markets tend to crash

• Markets tend to decline

• Markets tend to improve

• Markets tend to remain stable