The United States has no fiscal space left

Source: Heartland Institute
by Barry Poulson & John Merrifield

“Some economists argue the current low interest rates have expanded the ‘fiscal space’ for countries to pursue expansionary fiscal policies, using long-term bonds to lock in interest rates. Deficits in the medium term are justified as a stimulus to economic recovery and to finance investments for long-term economic growth. That view is challenged by economists who argue that high debt-to-GDP ratios have reduced — and in some cases eliminated — fiscal space, and that expansionary fiscal policies have exposed at least some countries to the risk of default.” (07/12/17)