Economists torn on fiscal policy

Lawmakers aren't the only ones who can't agree on what to do to fix the economy.

Business economists are split on whether a restrictive fiscal policy or more stimulus will give the flailing U.S. economy the boost that it needs, according to a survey released by the National Association for Business Economics on Monday.

Nearly half of those surveyed by NABE say that they would like to see a more restrictive fiscal policy in the next two years, while 37 percent of the respondents would opt for a more stimulative approach.

As Washington readies itself for another fiscal fight, lawmakers will have to decide how to balance raising tax revenues and cutting spending in order to reduce the federal deficit.

More than half -- 56 percent -- of economists surveyed said they favor reducing the deficit only or mostly through spending cuts; only about 7 percent of economists favored only or mostly tax increases. Thirty-seven percent of respondents said that they would prefer an approach that is equal parts spending cuts and tax increases.

Though 25 percent said that overhauling the tax code could be a good solution, more than two-thirds were not confident Congress could do so in the next 12 months.

Nearly 40 percent said reducing health care costs from Medicare and Medicaid would likely be the most successful part of a deficit-reduction plan.

The survey was conducted just before the August 2 debt deal, in which lawmakers agreed on a plan to raise the debt ceiling by at least $2.1 trillion and enforce spending cuts of roughly $2.4 trillion over the next 10 years.

The survey, which polled 250 members of the NABE, is conducted semiannually.