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The International Implications of Paying Down the Debt


  • Edwin M. Truman

    () (Peterson Institute for International Economics)


The debate about what to do with the projected substantial federal budget surpluses over the next 10 years focuses on three basic options: cut taxes, increase expenditures, and retire or pay down federal debt. The result will be a combination. The issue is that of relative proportions. Larger tax cuts imply that a smaller share of projected surpluses will be devoted to increasing expenditures or paying down debt. Paying down more debt means that tax cuts or expenditure increases will have to be smaller.

Suggested Citation

  • Edwin M. Truman, 2001. "The International Implications of Paying Down the Debt," Policy Briefs PB01-07, Peterson Institute for International Economics.
  • Handle: RePEc:iie:pbrief:pb01-07

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    Cited by:

    1. James K. Galbraith, 2005. "Breaking out of the Deficit Trap: The Case Against the Fiscal Hawks ," Economics Public Policy Brief Archive ppb_81, Levy Economics Institute.
    2. Edwin M. Truman, 2005. "Budget and external deficits: not twins but the same family," Proceedings, Federal Reserve Bank of San Francisco, issue Feb.
    3. Edwin M. Truman, 2005. "Postponing Global Adjustment: An Analysis of the Pending Adjustment of Global Imbalances," Working Paper Series WP05-6, Peterson Institute for International Economics.

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