Author Description

A fiscal system is considered to be sustainable over a certain period of time if the debt-to-GDP ratio at the end of the period is equal to that at the beginning of the period [Blanchard et al. [...] Demographic foundations of intergenerational equity The basis of the concerns about the public debt and intergenerational equity is the projected increase in the senior and total dependency ratios. [...] Our calculations indicate that the projected government expenditures can be financed by a tax structure that generates substantially lower aggregate tax rates over the next 22 years and even further into the future, given the considerable difference between the projected tax rate in 2025-26 and the actual rate in 2003-04 and the minuscule increase projected for the last five years of the projectio [...] The time-path of the public debt and the debt-to-GDP ratio under the alternative three cases is shown in the Appendix. [...] The November 2004 Economic and Fiscal Update contains estimates of the federal debt and the debt-to-GDP ratio over the period from 2003-04 to 2009-10 under the alternative assumptions of balanced budgets and debt repayment equal to the Contingency Reserve.