Apr 22, 2011

Plan to stop economic disaster cruise control

The Effects of Automatic Stabilizers on the Federal Budget http://www.getliberty.org/content_images/Driving%20Right%20Off%20the%20Cliff.jpg
CBO report focuses on the automatic responses of revenues and outlays to developments in the economy—the automatic stabilizers—that reflect cyclical movements in real (inflation-adjusted) output and unemployment.
CBO estimates that automatic stabilizers are adding significantly to the budget deficit now but that their contribution will steadily fade over the next few years. In 2010, CBO estimates, automatic stabilizers added the equivalent of 2.4 percent of potential GDP to the deficit, an amount somewhat greater than the 2.1 percent added in 2009.

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