Policy Backgrounders

The Federal Budget Deficit and the Public Debt—Dealing with a Lurking Problem

December 07, 2016

With annual deficits adding to the accumulated debt at a pace exceeding the rate of growth of the economy, the US federal government’s finances are on an unsustainable path. This isn’t just a government problem—it’s a problem for all of us. As the federal debt and the interest on that debt rise, they inevitably divert our nation’s resources from more productive uses. The solutions CED recommends in this policy brief address the problem in a balanced and workable way. Lawmakers can meet the challenge if they demonstrate leadership and put everything on the table for negotiation.