A “Mere” $300 Billion: Should a $300 Billion Deficit Be Considered a Victory?

Center on Budget and Policy Priorities, 5/22/06

Five points:
1. Rising inequality contributes to revenue growth.
2. Revenue growth will likely slow.
3. A $300 billion deficit increases the burden on future generations.
4. At 2.3 percent of GDP, a $300 billion deficit is well above historical norms.
5. At this stage of the business cycle, the deficit should be much lower.