Brief Countdown to Catastrophe
Leonard E. Burman
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This article, written for a lay audience, discusses the causes and consequences of catastrophic budget failure. When Americas ballooning federal debt becomes unmanageable, we might simply refuse to honor our obligations, triggering a worldwide financial collapse and an economic downtown that would make the recent unpleasantness seem like a walk in the park. Or we might create enough money to pay back our creditors, domestic and foreign, triggering a hyperinflation reminiscent of failed states like the Weimar Republic in the 1930s (or, more recently, Zimbabwe) that would wipe out the savings of anyone caught holding wealth in dollars.
Research Areas Economic mobility and inequality Taxes and budgets
Tags Fiscal policy State and local tax issues Federal budget and economy Income and wealth distribution
Policy Centers Urban-Brookings Tax Policy Center