71. Fiscal and Generational Imbalances and Generational Accounts: A 2012 Update
- Author:
- Jagadeesh Gokhale
- Publication Date:
- 11-2012
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Official federal budget accounts are constructed exclusively in terms of current cash flows – receipts from taxes and fees and outlays on purchases and transfers. But cash-flows do not reveal economically relevant information about who benefits and who loses from government policies. Cash flows also do not reveal how changes in government's policies redistribute resources within and across generations, including reducing the tax burden on today's generations and increasing it on future ones. Because most government transact ions are targeted by age and gender, the federal government can bring about large resource transfers across generations. Intergenerational resource transfers will grow larger as the composition of budget receipts and expenditures changes with relatively faster growth of age-and-gender-related social insurance program. Intergenerational redistributions across generations through federal government operations could substantially affect different generations' economic expectations and choices and exert powerful long-term effects on economic outcomes.
- Topic:
- Economics, Government, Health, Human Welfare, Markets, and Monetary Policy
- Political Geography:
- United States