Tuesday, September 13, 2011

Tough Choices For Government Spending Programs: Significantly Tax More, Substantially Spend Less or Both: CBO Congressional Testimony

From "Confronting The Nation's Fiscal Policy Challenges" by Douglas Elmendorf, CBO Director, September 13, 2011, testimony before the Joint Select Committee on Deficit Reduction, US Congress:
Given the aging of the population and the rising costs for health care, attaining a sustainable budget for the federal government will require the United States to deviate from the policies of the past 40 years in at least one of the following ways:
  • Raise federal revenues significantly above their average share of GDP;

  • Make major changes to the sorts of benefits provided for Americans when they become older; or

  • Substantially reduce the role of the rest of the federal government relative to the size of the economy.
The nation cannot continue to sustain the spending programs and policies of the past with the tax revenues it has been accustomed to paying. Citizens will either have to pay more for their government, accept less in government services and benefits, or both. [Emphasis added].
Read the complete CBO statement here, watch the video of the testimony below or look at the PowerPoint slides from the presentation below the video.

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