Issues posed by chronic US deficits

Policy makers do not seem to learn from past mistakes. The same fiscal problems that were generated by Vietnam War finance are present again in connection with the Iraq War. Also the deficit generating policies of the Reagan Administration did not “… get away with it …” as suggested as justification for the present deficits. Uncertainty and attitudes towards energy policies once again are troublesome. Monetary policy alone, cannot deal with present deficit problems; there is a need for appropriate policy coordination - monetary and fiscal.