The U.S. federal government has been habitually spending more money than it receives in taxes, running federal budget deficits every year but 5 since 1969. The federal debt, which is the accumulation of these deficits over time, can pose risks to the U.S. economy. But, in times of economic distress, a rising debt might be needed to buffer the economy. Our posts cover whether debt should be cause for concern; welfare spending and the federal budget; state and local finance; and the impact of COVID on public finance, among others.
January 22, 2023
As the U.S. Congress fails to raise the debt ceiling in a timely manner, what lessons might policy-makers draw from the British budget crisis of September 2022?
December 5, 2022
The impact on the Federal budget of rising interest rates is not immediately transparent due to the various types of outstanding government debt.
October 30, 2022
As of October 2022, the U.S. national debt stood at over $31 trillion. That amounts to nearly $90,000 of debt per citizen. But is there an upside to a government spending more than its tax revenues?
February 8, 2021
Olivier Blanchard joins Michael Klein to discuss the costs of a growing federal budget deficit today, and for future generations.
June 25, 2020
State tax revenues are falling while spending needs due to the coronavirus are spiking. Balanced budget amendments may lead states to raise taxes or cut spending.
June 9, 2020
The increase in the ratio of debt to GDP does not mean the U.S. should tighten fiscal policy. Low interest rates and a return to economic growth would make public debt less costly.
May 11, 2020
Ballooning government debt raises legitimate concerns. But there are also risks associated with pulling back expansionary fiscal efforts too early.
February 1, 2020
The CBO projects federal budget deficits to average more than 5 percent of GDP in the last three years of this decade, compared to Trump administration estimates below 2%. Why do they differ?
September 8, 2019
Corporate debt in the U.S. stands at or near all-time highs. It is important to pay attention not just to the amount of debt but also to its composition.