Brief Budget Blues: The Fiscal Outlook and Options for Reform
Alan J. Auerbach, William G. Gale, Peter Orszag, Samara R. Potter
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Establishing a sustainable fiscal policy is central to the nation's long-term economic prospects, but requires a clear understanding of how past and current policies affect future resources. The federal budget should, but does not, provide this information, both because the task is difficult and current accounting practices are deficient. This paper shows that adjusting the official budget for many accounting and economic issues implies a bleak fiscal outlook that presents policymakers with difficult choices. We also explore options to restore fiscal sustainability directly and to improve the budget process that governs fiscal decisions.
Research Areas Economic mobility and inequality Taxes and budgets
Tags Fiscal policy Federal budget and economy
Policy Centers Income and Benefits Policy Center