repo auctions, and secondary market trading at the primary dealer level. turning to today ’ s function, this is the 5th ceremony bou is hosting to recognize the pd of the year. i wish to acknowledge the role this year ’ s award winner has played especially in providing more consistent coverage in the primary auction and repo operations and particularly their pricing. ladies and gentlemen, on behalf of the bank of uganda, i wish to announce that standard chartered bank uganda is the primary dealer of the year 2009. i now invite the managing director to receive the award. congratulations. i thank you.

inflation from its already low level. in these circumstances, monetary policy is able to be more patient. that said, no central bank can ever afford to be less than vigilant about the prospects for inflation. * * * the foregoing relatively optimistic short - term outlook for the u. s. economy is playing out against a backdrop of growing longer - term concern in financial markets about our federal budget. as you know, the congressional budget office is projecting that, if current policies remain in place, the unified budget will post deficits throughout the remainder of this decade - a sharp turnaround from the large and growing surpluses projected just a few years ago. given the events of the past three years - the economic downturn, the retrenchment in equity markets, the increased need for spending on homeland security, and the wars in afghanistan and iraq - some deterioration in the federal budget balance was probably unavoidable, particularly in the short term. one source of deterioration - the buildup of a larger military force structure - will not persist indefinitely. merely maintaining a given force structure rather than increasing it will remove an important factor driving the deficit higher. of course, the deterioration in the fiscal balance has already increased the level of debt relative to gdp, and thus has elevated the starting point from which policymakers will soon have to address the budget implications of the impending retirement of the baby - boom generation. recent budget deliberations are not encouraging. the current debate appears to be about how much to cut taxes or how much to increase spending. no significant constituency seems to support taking the actions that will be necessary to move toward, and one hopes achieve, budget balance. in retrospect, the emergence of budget surpluses in the late 1990s eroded the discipline that emerged as a consequence of the earlier fear of ever rising and, hence, potentially destructive deficits. indeed, many of the rules that helped to discipline budgetary decisionmaking in the 1990s - in particular, the statutory limits on discretionary spending and the so - called paygo rules - were allowed to expire. many analysts properly continue to be concerned that, without these enforcement mechanisms and the fundamental political will they signal, the built - in bias in favor of red ink will once again become entrenched. policymakers have become all too aware that government spending programs and tax preferences can be easy to initiate but extraordinarily difficult to shut down once constituencies develop that have a stake in maintaining the status quo. the now -