AAF’s Director of Fiscal Policy, Gordon Gray, released a brief reaction to last week’s CBO report, detailing the fiscal discipline necessary to bring the national debt down to its historical average. See excerpt below:
“Unlike after the second World War, our deficits cannot be erased by the transition from a war-footing to a peacetime economy. Rather, the United States will need to make fundamental changes to major health, retirement, and other spending programs as well as the tax code. To reduce the debt by 2048 to its 50-year historical average of 41 percent of GDP, the CBO recently calculated, policymakers would need to enact a fiscal consolidation of 3 percent of GDP each and every year compared to current budget projections. And this consolidation is only the primary deficit reduction required to achieve the debt target. CBO assumes, and its calculation relies upon, additional debt reduction from reduced interest costs and stronger economic growth.”

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