U.S. Debt and Deficits: Time to Reverse the Trend
James R. Barth
Milken Institute White Paper, November 2011
With the failure of the Congressional "supercommittee," national attention is once more focused on the issue of ever-mounting federal budget deficits. This paper provides a primer on budget deficits, and surpluses from the creation of the federal government. From 1790 to 2010, government spending averaged 8.7 percent of GDP; today it is 25 percent, fueling debt of historic levels. The only meaningful solution to reducing debt levels, the authors argue, is to cut entitlement programs, and then set a tax rate sufficient over the course of the business cycle to fund government spending.
Number of Pages in PDF File: 12working papers series
Date posted: November 30, 2011 ; Last revised: May 22, 2012
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