Analysis & Indicators

Blog Post

It’s Important to Distinguish Between Short-term Cyclical Deficits and Long-term Structural Deficits

July 27, 2017
Not all deficits are created equal. In designing policy responses, it is important to distinguish between “cyclical” and “structural” deficits. Cyclical deficits are caused by a weak economy. Recessions drive down government revenue because many workers and businesses are no longer earning as much taxable income. At the same time, government spending rises because more people need assistance through programs such as Medicaid, unemployment benefits and food stamps.

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Blog Post

Fiscal Policy Remains Unsustainable

July 05, 2017
While much has changed in the past 25 years, this fundamental reality has not: Federal budget policy remains on an unsustainable track, driven by structural forces that increase federal spending faster than revenues.
Blog Post

Time to Reform the Debt Limit

June 27, 2017

Congress has a curious way of doing financial business: It agrees to spend money and then periodically threatens not to pay the resulting bills.