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U.S. deficit control and private-sector wealth


  • Joëlle J. Leclaire


For over 30 years, American congresses and presidencies have consistently worked to reduce federal budget deficits. These efforts at deficit reduction/surplus generation did indeed contribute in many instances to lower federal budget deficits and even created surpluses. An apparent problem with deficit reduction/surplus generation is that every time government deficits are reduced, private-sector wealth also falls. Thus, growing levels of American household and business indebtedness are closely associated with the policy of reducing federal deficits. One way of alleviating the problem of growing household indebtedness is to reverse the policy aim of reducing federal budget deficits.

Suggested Citation

  • Joëlle J. Leclaire, 2008. "U.S. deficit control and private-sector wealth," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 31(1), pages 139-149, September.
  • Handle: RePEc:mes:postke:v:31:y:2008:i:1:p:139-149

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    References listed on IDEAS

    1. Lechthaler, Wolfgang & Merkl, Christian & Snower, Dennis J., 2010. "Monetary persistence and the labor market: A new perspective," Journal of Economic Dynamics and Control, Elsevier, vol. 34(5), pages 968-983, May.
    2. Michael C. Burda & Wolfgang Härdle & Marlene Müller & Axel Werwatz, 1998. "Semiparametric analysis of German East-West migration intentions: facts and theory," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(5), pages 525-541.
    3. John Hall & Udo Ludwig, 2007. "Explaining persistent unemployment in eastern Germany," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 29(4), pages 601-619.
    4. Hans-Werner Sinn, 1995. "Staggering along: wages policy and investment support in East Germany," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(4), pages 403-426, December.
    5. Burda, Michael C., 1993. "The determinants of East-West German migration: Some first results," European Economic Review, Elsevier, vol. 37(2-3), pages 452-461, April.
    6. Lehmann, Harald & Ludwig, Udo & Ragnitz, Joachim, 2005. "Originäre Wirtschaftskraft der neuen Länder noch schwächer als bislang angenommen," Wirtschaft im Wandel, Halle Institute for Economic Research (IWH), vol. 11(5), pages 134-145.
    7. Dennis J. Snower & Christian Merkl, 2006. "The Caring Hand that Cripples: The East German Labor Market after Reunification," American Economic Review, American Economic Association, vol. 96(2), pages 375-382, May.
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    deficit; fiscal policy; private wealth; surplus;


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