The St. Louis branch of the Federal Reserve has come out with the findings of their groundbreaking research into the primary cause of the rise in the U.S. national debt. Is it too little revenue (i.e. tax collections?) Is it too much spending? The report’s authors Daniel L. Thornton and Kevin L. Kliesen summarize their findings:
The rise in the national debt... is entirely a consequence of the federal government’s increase of expenditures without an offsetting increase in revenues.
Oddly enough, they limited their study to consider only the situation that existed up through 2007. Perhaps what has happened since 2007 is too much for the Fed’s top economists to handle....
HT: Barry Ritholtz
Kliesen, Kevin L and Thornton, Daniel L. The Federal Debt: Too Little Revenue or Too Much Spending? Economic Synopses, 2011-No. 20. Federal Reserve Bank of St. Louis, 07-07 2011. http://research.stlouisfed.org/publications/es/article/8856.
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