![]() Government budget deficits (the excess of spending over revenue) in industrial countries have been growing as a percent of GDP for the past 20 years. ![]() Rather, the persistence of budgetary shortfalls during a long period of peace, when governments traditionally pay off debts and save for the future, should set the alarm bells ringing.įurthermore, projected increases in the cost of government programs, as populations age and economic growth lags, give cause for further concern. ![]() In fact, most countries now run much smaller deficits (as a ratio of GDP) than they did during wartime. Yet, the absolute size of deficits is not their most alarming aspect. This is unfortunate, since deficits should arouse genuine concern, particularly as their size in some industrial countries is daunting. Political leaders have so frequently cried wolf over budgetary spending that voters are skeptical about talk of budgetary crises. Readers interested in the original Working Paper may purchase a copy from IMF Publication Services. The following paper, prepared by Rozlyn Coleman, draws on material originally contained in IMF Working Paper 95/128, "Long-Term Tendencies in Budget Deficits and Debt," by Paul R. This material is refined for the general readership by editing and partial redrafting. The raw material of the series is drawn mainly from IMF Working Papers, technical papers produced by Fund staff members and visiting scholars, as well as from policy-related research papers. Its aim is to make some of the economic research being produced in the International Monetary Fund on topical issues accessible to a broad readership of nonspecialists. The Economic Issues series was inaugurated in September 1996. Use the free Adobe Acrobat Reader to view pdf files. September 1996 PDF File (231k) also available.
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