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US sovereign debt crisis: mounting challenges, practical solutions

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  • Dana M. Peterson

    (University of Wisconsin-Madison)

Abstract

The US has reached a crisis stage regarding mounting sovereign debt, but a change of mindset and adoption of practical solutions can restore the nation to fiscal health. Unless actions are taken now to change the trajectories, deficits and debt are anticipated to enlarge over the coming decades with an aging population boosting spending, increasing debt service, and insufficient revenues. While there is no silver bullet, there are myriad policy actions that can cut deficits, lower debt to a sustainable level, reduce financial stability risks, and support US economic growth over the long run. Moreover, focusing upon lowering debt over a 20- or 30-year horizon instead of the typical 10-year CBO forecasting period can help rein in federal debt without significant damage to the economy.

Suggested Citation

  • Dana M. Peterson, 2024. "US sovereign debt crisis: mounting challenges, practical solutions," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 59(3), pages 143-148, July.
    • Handle: RePEc:pal:buseco:v:59:y:2024:i:3:d:10.1057_s11369-024-00354-6
    DOI: 10.1057/s11369-024-00354-6
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