Congressional Budget Office: All Priced Publications: 2011 Long-Term Budget Outlook Contributor(s): Congressional Budget Office (Editor), Army Department (Editor) |
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ISBN: 0160888328 ISBN-13: 9780160888328 Publisher: Government Printing Office
Binding Type: Paperback - See All Available Formats & Editions Published: July 2011 * Out of Print * Click for more in this series: Congressional Budget Office: All Priced Publications |
Additional Information |
BISAC Categories: - Business & Economics | Economic Conditions - Business & Economics | Finance - Financial Risk Management - Business & Economics | Budgeting |
Age Level: 12-10 |
Grade Level: 7-5 |
Series: Congressional Budget Office: All Priced Publications |
Physical Information: 116 pages |
Features: Glossary |
Descriptions, Reviews, Etc. |
Publisher Description: NOTE: NO FURTHER DISCOUNT FOR THIS PRINT PRODUCT- OVERSTOCK SALE- Significantly reduced list price In this report, CBO presents the long-term budget outlook under two scenarios that embody different assumptions about future policies governing federal revenues and spending. Neither of those scenarios represents a prediction by CBO of what policies will be in effect during the next several decades, and the policies adopted in coming years will surely differ from those assumed for the scenarios. Moreover, even if the assumed policies were adopted, their economic and budgetary consequences would undoubtedly differ from those projected in this report because outcomes also depend on economic conditions, demographic trends, and other factors that are difficult to predict. The Impact of Growing Deficits and Debt CBO's projections in most of this report understate the severity of the long-term budget problem because they do not incorporate the negative effects that additional federal debt would have on the economy, nor do they include the impact of higher tax rates on people's incentives to work and save. In particular, large budget deficits and growing debt would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment--which in turn would lower income growth in the United States. Taking those effects into account, CBO estimates that under the extended-baseline scenario, real (inflation-adjusted) gross national product (GNP) would be reduced slightly by 2025 and by as much as 2 percent by 2035, compared with what it would be under the stable economic environment that underlies most of the projections in this report. Under the alternative fiscal scenario, real GNP would be 2 percent to 6 percent lower in 2025, and 7 percent to 18 percent lower in 2035, than under a stable economic environment. Rising levels of debt also would have other negative consequences that are not incorporated in those estimated effects on output:
To keep deficits and debt from climbing to unsustainable levels, policymakers will need to increase revenues substantially as a percentage of GDP, decrease spending significantly from projected levels, or adopt some combination of those two approaches. Making such changes while economic activity and employment remain well below their potential levels would probably slow the economic recovery. However, the sooner that medium- and long-term changes to tax and spending policies are agreed on, and the sooner they are carried out once the economy recovers, the smaller will be the damage to the economy from growing federal debt. Earlier action would permit smaller or more gradual changes and would give people more time to adjust to them, but it would require more sacrifices sooner from current older workers and retirees for the benefit of younger workers and future generations. More Congressional Budget Reports and Economic Analyses can be found here: https: //bookstore.gpo.gov/catalog/budget-economy/congressional-budget-reports-economic-analyses Our Budget & Economy resources collection is available here: https: //bookstore.gpo.gov/catalog/budget-economy |
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