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The Feasibility of the Projected Federal DEBT

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  • Thomas J. Finn

    (Wayne State University)

Abstract

A relation, familiar in the literature on the feasibility of persistent government deficits, is restated to accommodate the Office of Management and Budget projections. It is then shown that U.S. budget policy was not on a long-run feasible course in the period from fiscal year 1982 through fiscal year 1987; but, when monetization of the debt and taxes on interest are taken into account, the projected debt is on a potentially feasible course.

Suggested Citation

  • Thomas J. Finn, 1990. "The Feasibility of the Projected Federal DEBT," Public Finance Review, , vol. 18(3), pages 360-368, July.
    • Handle: RePEc:sae:pubfin:v:18:y:1990:i:3:p:360-368
    DOI: 10.1177/109114219001800307
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    References listed on IDEAS

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    1. Hamilton, James D & Flavin, Marjorie A, 1986. "On the Limitations of Government Borrowing: A Framework for EmpiricalTesting," American Economic Review, American Economic Association, vol. 76(4), pages 808-819, September.
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    5. Feldstein, Martin S, 1976. "Perceived Wealth in Bonds and Social Security: A Comment," Journal of Political Economy, University of Chicago Press, vol. 84(2), pages 331-336, April.
    6. Howell H. Zee, 1988. "The Sustainability and Optimality of Government Debt," IMF Staff Papers, Palgrave Macmillan, vol. 35(4), pages 658-685, December.
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