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Us Debt and Deficits: Time to Reverse the Trend[Note 1. This paper is an updated and modified version of ...]
Author(s) -
Barth James R.,
Li Tong
Publication year - 2012
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/j.1468-0270.2012.02181.x
Subject(s) - debt , entitlement (fair division) , government debt , government (linguistics) , federal budget , economics , government spending , monetary economics , debt to gdp ratio , business , economic policy , finance , internal debt , market economy , fiscal year , linguistics , philosophy , mathematical economics , welfare
This article provides a primer on budget deficits from the creation of the federal government. Today federal government spending is 24% of GDP (compared with its historical average of 8.8%), fuelling debt of historic levels. The only effective way to reduce debt levels is to cut entitlement programmes and then set a tax rate sufficient, over the course of the business cycle, to fund government spending.