On 26 July 2024, Giancarlo Corsetti, Pierre Werner Chair at the Robert Schuman Centre, released an analysis conducted with economists Guido Ascari, Tilda Horvath, and Riccardo Trezzi on the dire fiscal situation of the United States.
In the essay published on VoxEU, titled 'The US fiscal mess: Some unpleasant fiscal simulations', the authors argue that without significant fiscal adjustments, such as spending cuts or tax increases, the US could face a fiscal crisis. They emphasise the need for pre-emptive measures to stabilise the debt-to-GDP ratio and avoid a situation where drastic and disruptive fiscal adjustments become necessary.
The potential for lower economic growth rates is also a concern, as slower growth would reduce the government's ability to generate revenue and manage debt. Overall, the article paints a concerning picture of the US fiscal outlook, urging policymakers to consider reforms to ensure long-term economic stability.
Find the full article on VoxEU.