The battle of the budget deficit

Donald B. Rice

Expert InsightsPublished 1985

This paper identifies the following issues as important in an understanding of the Federal budget deficit problem: (1) consideration of the budget and the economy as one mutually interacting system; (2) the recent history of government spending; (3) the total public budget, i.e., the combination of the Federal budget with all state and local budgets; (4) the distinction between government spending on purchases of goods and services and spending on transfer payments; and (5) government revenues. The author suggests that transfer payments must be made the centerpiece of serious efforts to get government spending under control; that an achievable reference level of the economy should be chosen, and a balanced budget sought around that level over the business cycle; that permanent spending indexation should be eliminated and all increases to the Federal budget should be voted annually rather than built in; and that "revenue-neutral" tax reform would help to lower deficits in indirect ways.

Document Details

Citation

Chicago Manual of Style

Rice, Donald B., The battle of the budget deficit. Santa Monica, CA: RAND Corporation, 1985. https://www.rand.org/pubs/papers/P7106.html.
BibTeX RIS

This publication is part of the RAND paper series. The paper series was a product of RAND from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.