The 2030s will bring a fiscal cliff. Here's how it got so steep. - The Washington Post
washingtonpost.com
The U.S. government has almost never run a surplus in good times — so why does the theory that it should still dominate budget debates?
Keynesian EconomicsPublic Choice TheoryFiscal PolicyTragedy of the Commons
Theory Briefing
- Governments are supposed to offset bad-year deficits with good-year surpluses, but the U.S. federal government has rarely done so in practice.
- The 2030s fiscal cliff didn't appear suddenly — it is the compounded result of decades of deficit spending across both boom and bust cycles.
- The gap between the textbook rule of balanced budgets and real political behavior is at the heart of why the cliff grew so steep.
- Structural pressures like aging populations and rising interest costs make future surpluses even harder to achieve than past ones.