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August 1, 2010
Graph of the Day for August 1, 2010
"Options for responding to a fiscal crisis would be limited and unattractive. The government would need to undertake some combination of three actions. One action could be changing the terms of its existing debt. This would make it difficult and costly to borrow in the future. A second action could be adopting an inflationary monetary policy by increasing the supply of money. However, this approach would have negative consequences for both the economy and future budget deficits. A third action could be implementing an austerity program of spending cuts and tax increases. Such budgetary adjustments, in the face of a fiscal crisis, would be more drastic and painful than those that would have been necessary had the adjustments come sooner." CBO.
Hoven's Index for August 1, 2010
Federal spending as percentage of GDP, 2008:
Total outlays: 21.0%
National defense: 4.3%
Direct payments to individuals: 10.7%
Grants to state & local governments for individuals: 2.1%
All other grants: 1.1%
Net interest: 1.8%
All other: 0.9%
Source: US Statistical Abstract, Table 459.
Graph of the Day Archive.