The U.S. federal government budget has run a deficit–it has spent more than it collected in revenues–every year but five over the past five decades. Under a deficit, the federal government needs to borrow in order to pay for government programs. The national debt is the accumulation of this borrowing, together with the associated interest owed to investors; it stood at over $31 trillion as of October, 2022.
The decisions governments make concerning taxation, borrowing, and spending–and the consequences of these policies for government deficits and debt–have profound and wide-ranging effects. They impact incentives and economic performance; growth; social welfare; and financial stability, among others. Our memos and podcasts address concerns about debt; the efficacy and distributional effects of tax policies and the social safety net; demographic implications for government finances; tax evasion; and state and local finance; among other topics.
May 11, 2023
The consequences of a failure to raise the debt ceiling are serious but difficult to quantify. Why does the U.S. have a debt ceiling, and what does it mean to raise it?
March 22, 2023
A look at the sources of U.S. government debt, and a discussion of the short and long run effects of government borrowing.
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.
March 29, 2022
The fiscal condition of state and local governments proved far less dire than forecast at the pandemic’s outset. How did predictions end up being so off target?
April 22, 2021
Public policy must address the fairness, efficiency, compliance, and revenue concerns raised by the taxation of of pass-through businesses.
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?