About this work
America’s fiscal challenge extends beyond annual budget negotiations. Rising entitlement costs and interest payments put debt on an increasingly difficult path. The March 2025 analysis estimates that stabilizing the debt ratio requires tax increases or spending reductions exceeding 2.5 percent of GDP. Balancing the budget would demand a substantially larger adjustment.
Cite this work
Marcello Estevão, Jonathan Fortun (2025). Global Macro Views: Blue, White, and in the Red: America’s Fiscal Crossroads. Institute of International Finance.