The thesis of this report is that the American people and their elected representatives focus too little on the long-term implications of budget decisions we make, or avoid making, today. From the way tables are presented in the president’s annual budget, to the dysfunction on Capitol Hill, to the less-than-edifying public debate over spending and taxes, we are fiscally short-sighted. The authors don’t agree on everything. They do agree on that much.
Some experts try to capture the budget future in a single number, often the size of federal debt relative to the size of the gross domestic product (GDP). By this metric, federal debt is higher than at any time in U.S. history, other than in the immediate aftermath of World War II. Withouta course correction, it will keep rising to unprecedented levels. A stable or declining debt/GDP ratio—in other words, federal debt that grows no faster than the overall economy—is a widely shared definition of fiscal sustainability. While there is broad agreement that the U.S. budget is on an unsustainable course, there is little consensus on what level of debt would be truly dangerous.