A Balanced Plan for Fiscal Stability and Economic Growth
Alex Brill, Joseph Antos, Andrew G. Biggs, and James C. Capretta | Peter G. Peterson Foundation
AEI Scholars, Joseph Antos, Andrew G. Biggs, Alex Brill, and James C. Capretta all took part in The Peterson Foundation’s 2024 Solutions Initiatives along with five other think tanks. Each of which came up with a plan to tackle the nation’s growing fiscal challenge.
Our plan seeks to achieve long-term fiscal stability and promote economic growth by aligning federal spending and revenue and pursuing market-based policy reforms. The plan reduces the national debt by over $60 trillion in 2054. In that year, debt as a share of the economy would drop significantly, from 166 percent of GDP in the baseline to about 85 percent of GDP as a result of the proposed reforms. More stringent spending policies could cut the debt further, but there is no easy or quick solution to the country’s fiscal challenges.
The plan emphasizes savings in the major entitlement programs — Social Security, Medicare, Medicaid, and health insurance subsidies — while continuing to protect those less fortunate. The plan raises the same revenue (in present discounted value across the 30-year horizon) as the current law baseline, resulting in a revenue level above historical averages, as a share of GDP. The plan reforms the income tax by broadening the base and reducing statutory rates to promote economic growth.
Read the full report here.
