It remains unclear how or even if our government will deal with America's troubling fiscal problems. The following studies and commentaries provide analysis and possible paths to a solution in considerable depth.
1.
Train Wreck: A Conference on America’s Looming Fiscal Crisis
was held last week at the USC Law School. Conference papers addressed a number of issues, including the need to pay attention to tax expenditures, the burden of state pensions, the potential for catastrophic budget failure, and the mathematical impossibility of solving our budget woes by raising income taxes on the highest earners. The overall summary conclusion is that our fiscal trajectory is unsustainable due to the aging of the population and rising healthcare spending.
2.
Choosing the Nation’s Fiscal Future
was released last week by the National Research Council and the National Academy of Public Administration. This report provides a comprehensive overview of our budget challenges and then lays out strategies for addressing them. The key issues raised are how big a government we want and how that government should balance the interests of older and younger generations.
3.
Red Ink Rising: A Call to Action to Stem the Mounting Federal Debt
was released last month by the Pew-Peterson Commission on Budget Reform. I
commented on it
previously and also mentioned it
here
. This report reviews the fiscal situation and makes six general recommendations: (a) commit immediately to stabilize the debt at 60% of GDP by 2018; (b) develop a specific and credible debt stabilization package in 2010; (c) begin to phase in policy changes in 2012; (d) review progress annually and implement an enforcement regime to stay on track; (e) stabilize the debt by 2018; and (f) continue to reduce the debt as a share of the economy over the longer term.
4.
The Right Target: Stabilize the Federal Debt
was released last week by the Center on Budget and Policy Priorities. It provides an overview of budget challenges and agrees with the Pew-Peterson report in many qualitative ways, but it disagrees on the speed of implementation in that it claims that the Pew-Peterson Commission targets are "overly ambitious." The authors advocate that budget deficits be reduced to 3% of GDP or lower by 2019 (a goal that OMB Director Peter Orszag has also mentioned).
5.
A Path to Balance: A Strategy for Realigning the Federal Budget
was released last month by the Center for American Progress ("CAP"). This report takes a slightly different approach from the others, focusing on achieving primary budget balance (
i.e
., balancing revenues with spending excluding interest payments) rather than a debt-to-GDP target. Those concepts are closely related in analytic terms, but as
Stan Collender
points out, the concept of achieving primary budget balance may be a better talking point than stabilizing the debt-to-GDP ratio. Because CAP has close ties to the Obama Administration, Collender also suggests that its budget thoughts may offer a "sneak peek" about what to expect in the President’s upcoming budget.
Happy reading.