Catastrophic Budget Failure
Continuation of current U.S. fiscal policy will lead to an enormous accumulation of debt with potentially disastrous economic consequences. Exacerbated by the recent economic turmoil and fueled by the willingness of creditors to lend at very low interest rates, there is significant risk that necessary fiscal reform will be put off. In this paper, we consider the causes, mechanisms, and macroeconomic fallout of a catastrophic budget failure — a situation in which markets’ perception of the credit worthiness of the U.S. government rapidly deteriorates, leaving it unable to access credit markets at any reasonable rate of interest and generating a high probability of the previously unthinkable: the U.S. government defaulting on its debt obligations.
Volume (Year): 63 (2010)
Issue (Month): 3 (September)
|Contact details of provider:|| Postal: |
Fax: (202) 737-7308
Web page: http://www.ntanet.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:63:y:2010:i:3:p:561-83. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Charmaine Wright)
If references are entirely missing, you can add them using this form.