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Once More Unto the Breach

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Once More Unto the Breach

The Deteriorating Fiscal Outlook

Brookings Institution,

5 min read
5 take-aways
Audio & text

What's inside?

The US’s long-term budget scenario is unsustainable, and the nation’s economic future is at risk.

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Editorial Rating

8

Qualities

  • Innovative
  • Eye Opening
  • Overview

Recommendation

The US economic recovery, along with declines in health care spending projections, had produced some positive gains in the country’s fiscal outlook. By early 2016, alas, this dynamic turned negative, and now long-term forecasts are increasingly disturbing. Economic and policy professionals Alan J. Auerbach and William G. Gale compellingly articulate the case that the United States faces severe future fiscal instability. getAbstract recommends this eye-opening report to anyone interested in the health and vibrancy of the US economy over the coming decades.

Summary

Recent projections about the United States’ fiscal condition in 10 years’ time, 25 years’ time and beyond raise serious concerns. Since the economic recovery began in 2009, the outlook for the country’s budgetary situation had improved, thanks to weak yet steady growth, spending cuts, and a forecast easing of health care price pressures. Short-term deficits also shrank, as revenues accelerated along with the economic rebound. But by February 2016, the fiscal prognosis had changed: Altered assumptions, rules, and “economic and technical factors” now lead analysts to predict that the debt-to-GDP ratio...

About the Authors

Alan J. Auerbach is a professor at the University of California, Berkeley. William G. Gale holds senior posts at the Brookings Institution.

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