BibTeX
@MISC{Thornton_theu.s.,
author = {Daniel L. Thornton},
title = {The U.S. Deficit/Debt Problem: A Longer-Run Perspective},
year = {}
}
Share
 |
 |
 |
 |
||
OpenURL
Abstract
The U.S. national debt now exceeds 100 percent of gross domestic product. Given that a significant amount of this debt is the result of governmental efforts to mitigate the effects of the financial crisis, the recession, and the anemic recovery, it is tempting to think that the debt problem is a recent phenomenon. This article shows that the United States was on a collision course with a major debt problem for nearly four decades before the financial crisis. In particular, the debt problem began around 1970 when the government decided to significantly increase spending without a corresponding increase in revenue. The analysis suggests that the debt problem cannot be permanently resolved without creating a mechanism to prevent the government from running persistent deficits in the future. (JEL E62, H62, H63) Federal Reserve Bank of St. Louis Review, November/December 2012, 94(6), pp. 441-55. The U.S. debt has surpassed 100 percent of gross domestic product (GDP). This debt burden is due in part to the extremely large deficits incurred by attempts to mitigate the effects of the financial crisis, the relatively deep and prolonged recession, and the anemic economic recovery. Given the emphasis on the financial crisis and its aftermath, it is important to realize the U.S. deficit/debt problem began over four decades ago. This longerrun perspective suggests that the recognition of the seriousness of the problem and the need
Keyphrases
u.s. deficit debt problem financial crisis longer-run perspective debt problem gross domestic product november december anemic recovery debt burden federal reserve bank corresponding increase significant amount u.s. debt longerrun perspective large deficit collision course louis review major debt problem prolonged recession recent phenomenon jel e62 u.s. national debt united state persistent deficit debt problem cannot governmental effort anemic economic recovery
