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.
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.
July 22, 2019
In what has become a predictable cycle, policymakers meet under pressure to raise the “debt ceiling,” the legal limit on the amount of debt the federal government can accumulate.
June 7, 2019
Modern Monetary Theory (MMT) has attracted attention, especially among many who see in it a support for greater government spending.
February 13, 2019
Over the next decade, the U.S. is on course for routine trillion-dollar annual deficits in the federal budget and the highest debt-to-GDP ratio in its history.
December 19, 2018
The extent of public pension underfunding varies across the U.S. Some proposed solutions, such as the use of pension obligation bonds, have considerable downsides.