The Causal Relation between Federal Expenditures and Receipts

Federal expenditures have consistently exceeded Federal revenues since 1970. In fact, the Federal government has seen a surplus in only five years since 1950. The symptoms of such fiscal imbalance are, of course, budget deficits. While budget deficits are nothing new in U.S. history, the recent and projected size of the deficit during peacetime nonrecessionary years has been the cause of much concern to academics, the news media, and politicians. This preoccupation with Federal deficits has produced a variety of policy proposals to deal with them.