Perspectives on the Federal Budget Deficit

This article, which appeared in the GAO Review, Vol. 19, Issue 2, Spring 1984, placed the Federal budget deficit in a historical context and presented overviews of the policy decisions and social choices that affect the budget. The relationships between the deficit and a slowed economy, inflation, higher interest rates, and the investment of foreign capital were explained. Each of the major components of the budget was discussed from a historical, social, and political perspective. Finally, the article suggested that slowing the increase of expenditures and raising taxes are the primary options to bring down budget deficits. It was noted that, while in the short run certain groups would be adversely affected by these options, in the longer run the Nation as a whole would benefit.