Stemming the tide (US fiscal deficit)

Citation

(2010), "Stemming the tide (US fiscal deficit)", Strategic Direction, Vol. 26 No. 6. https://doi.org/10.1108/sd.2010.05626fad.009

Stemming the tide (US fiscal deficit)

Article Type: Abstracts From: Strategic Direction, Volume 26, Issue 6

The Economist (UK), 21-27 November 2009, Vol. 393 No. 8658, Start page: 27, No. of pages: 3

Looks at how the USA can reduce its federal deficit, which has risen hugely because of the recession and the fiscal stimulus. Considers the urgency of the need to reduce the deficit, quoting forecasts from the Congressional Budget Office, and looks at how this can be done.Reviews the potential to cut government spending on healthcare and social security, discussing the impact of Obama’s health reforms, judging that these will absorb some revenue that could be spent on reducing the deficit; raising the age at which people become eligible for Medicare; and altering the Medicaid grant system to encourage states to control costs, among other things. Also looks at the potential to introduce tax reform, for example, broadening the income-tax base by eliminating loopholes and getting rid of deductions for employer-provided healthcare. Also considers the advantages of introducing a broad tax on consumption. Assesses if Congress would agree to these measures, focusing on the option of setting up a bipartisan commission to manage the process. An inset lists the pros and cons of a value-added tax.Article type: ViewpointISSN: 0013-0613Reference: 39AC234

Keywords: Cost reduction, Economy, Health care, Recession, Social welfare, Taxation, USA