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Long-term deficit is chief fiscal problem facing U.S., survey says

August 26, 2013|By Shan Li
  • Many economists say the long-term federal deficit is a bigger fiscal challenge than the current deficit.
Many economists say the long-term federal deficit is a bigger fiscal challenge… (Scott Eells / Bloomberg )

The top fiscal issue looming for the U.S. is the ballooning fiscal deficit in the next 20 years, according to a recent survey of economists.

Many economists believe deficits in the 2020s and 2030s are a more pressing issue than current deficits or those that will be racked up in the next decade, according to a survey by the National Assn. for Business Economics.

Economists were mixed on how to fix the long-term problem, which will be exacerbated by aging baby boomers who will increasingly rely on Social Security payments and Medicare.

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Nearly 40% said tackling the issue requires upping revenue in tandem with reining in spending, while 32% said the best tactic overall is just better restraint on spending. An additional 20% said encouraging economic growth is the best option for managing the deficit.

Most economists agreed that the Federal Reserve's current policy of buying up bonds in order to keep interest rates low is "about right." There have been hints that the Fed may start easing that huge economic stimulus, but the economists surveyed are divided about when that will start.

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Follow Shan Li on Twitter @ShanLi

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