Will It Take a Crisis to Fix Fiscal Policy?
AbstractThe U.S. national debt is on a trajectory to reach 185 percent of gross domestic product by 2035 unless there is a drastic change in federal fiscal policy. The main drivers of this situation are Social Security and health care programs, whose growth is amplified by an aging population and increasing medical costs, a dysfunctional Congress and an unwillingness to tackle the increasing burden of Social Security and the medical programs. The National Commission on Fiscal Responsibility and Reform and the Bipartisan Policy Center's Debt Reduction Task Force have produced thoughtful and sound plans for debt reduction but have produced little political traction. Reluctance to come to grips to the U.S. federal debt problem has increased the risks of a sovereign debt crisis, and the paper spells out potential responses, should one occur. Given the obstacles to a major overhaul of fiscal policy, it is difficult to see how it will be avoided.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Business Economics.
Volume (Year): 46 (2011)
Issue (Month): 2 (April)
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Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, volume 1, number 8973.
- Ray C. Fair, 2011. "What It Takes to Solve the U.S. Government Deficit Problem," Cowles Foundation Discussion Papers 1807, Cowles Foundation for Research in Economics, Yale University, revised May 2012.
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