1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Restoring Fiscal Sustainability in the United States

The United States faces challenging budgetary prospects, as do most other OECD countries. The federal budget deficit widened considerably during the recession, reaching about 10% of GDP in both 2009 and 2010, reflecting the operation of automatic stabilizers and the policy response to the crisis. Consequently, public debt now stands at its highest level since the early–1950s. The Administration has proposed the objective of stabilising the debt-GDP ratio by 2015, which is realistic in scope and ambition, though it requires fiscal tightening measures which are yet to be identified. In the next decade, the effects of population ageing on entitlement spending will be increasingly felt and the fiscal situation could deteriorate significantly in the absence of structural reforms of pension and, especially, health-care programmes.

English

Keywords: VAT, deficit, debt, United States 2010, health care, sustainability, tax expenditures, budgets, ageing populations, fiscal policy
JEL: H51: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Health; H68: Public Economics / National Budget, Deficit, and Debt / Forecasts of Budgets, Deficits, and Debt; H60: Public Economics / National Budget, Deficit, and Debt / National Budget, Deficit, and Debt: General; H55: Public Economics / National Government Expenditures and Related Policies / Social Security and Public Pensions; H75: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Government: Health; Education; Welfare; Public Pensions; B20: History of Economic Thought, Methodology, and Heterodox Approaches / History of Economic Thought since 1925 / History of Economic Thought since 1925: General
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