A Compromised Fed Would Risk a Fiscal Crisis
Keep the White House far away from the Federal Reserve.
Photographer: Anna Moneymaker/Getty Images
The US fiscal outlook continues to worsen. The nonpartisan Congressional Budget Office projects the country will run annual budget deficits of about 6% of gross domestic product per year over the next 10 years. This would push the total federal debt burden (relative to the size of the economy) to new highs, far exceeding the prior World War II peak.
Several factors are at play. First, the population is aging. The number of retirees will grow quickly as the baby boomer generation retires, increasing the cost of Medicare and Social Security spending. At the same time, the crackdown on immigration and falling fertility rates will cause the number of workers to stagnant.