Economic Risks

Congress once tightened the budget when its debt outlook worsened. The first release of the Deficit Management Scorecard finds that fiscal policy has become generally looser in the last 20 years, and the period covering the One Big Beautiful Bill Act is the largest deviation from pre-2004 practice in four decades of comparable data.

Even assuming a return to baseline immigration in 2029, the current slowdown in immigration will likely have long-run impacts on business formation and productivity.

This interactive tool allows you to explore the impact of federal deficits.

Increases in federal debt add to the cost of living for households over time. A permanent 1%-of-GDP increase in the primary deficit results in a loss in household purchasing power of $300-1,250 per household.

One of the cornerstone assumptions in macroeconomic modeling is the reaction of the central bank to a policy shock. The political independence of the central bank has major impacts on how fiscal policy affects the economy.

The US enjoys a safe harbor investment premium—a value that investors place on US safety, soundness and stability. Even a modest move in risk premia would have profound implications for the US.