Some quick excerpts of what others are saying.
Long-term fiscal projections for the United States paint a grim picture. Unless there are major policy changes, expenditure will consistently grow faster than revenue, eventually leading to a debt crisis.
The three things people need to know about the deficit are:
- In the long term– after 2020– we get health care spending under control or else.
- In the medium term– between 2012 and 2020– we don’t have a debt and deficit problem if congress sticks to PAYGO; we do if it doesn’t.
- In the short term– between now and 2012– our problem is not that our deficit is too large but that it is too small.
How can we reconcile the competing requirements of short-term support for the economy and longer term fiscal solvency? The challenge for policymakers is to formulate strategies for fiscal solvency– what we often call “exit strategies”– and communicate these strategies to the general public….
First, governments can reform their institutional fiscal framework to make it more likely that fiscal adjustment takes place when the time for action arrives….
Second, various reforms in health and pension entitlements, though politically not easy, can be undertaken without jeopardizing economic recovery.