The Negative Implications of Fiscal Consolidation on the U.S. Economy

At a recent event, Martin Baily discussed the level of borrowing by the U.S. government and the implications that budgetary consolidation might have on economic recovery.

He noted that the economy is still fragile, and a sudden fiscal consolidation would be a mistake. While other European countries, such as Ireland and the U.K., have been forced to take that step, he believes that the U.S. has the capacity to maintain growth without such drastic measures.