The US budget deficit is approaching $1 trillion. Some view this milestone as ominous, while others see little to fret about, thanks to cheap credit, the ready availability of buyers for US Treasury securities and low inflation. But a preoccupation with cutting expenditures to rein in government overlooks the fact that the real driver of the deficit is a steep drop in revenue due to tax cuts. So say economists Jason Furman and Lawrence H. Summers in this concise but worthwhile treatment of a well-worn topic, which will appeal primarily to policy experts and analysts.
About the Authors
Former Treasury Secretary Lawrence H. Summers is a professor and president emeritus of Harvard University. Jason Furman is a professor at the Harvard Kennedy School of Government.