Paying off the National Debt: Some Intergenerational Consequences

Publication Date: October 2000

Publisher: Library of Congress. Congressional Research Service

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Research Area: Economics

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Abstract:

A major change in the fiscal regime of the United States occurred in the 1990s. The large and persistent federal budget deficits that characterized the 1980s and early 1990s gave way to budget surpluses. The budget deficits were responsible for the large growth in the national debt. The current and projected budget surpluses are large enough to make it possible to pay off the national debt. Current debate centers on the use of the surplus. Some argue that if the surpluses are used for debt retirement, a substantial redistribution of income and wealth in favor of future generations of Americans will occur. Others contend that the intergenerational consequences of past deficits should also be considered. This paper will be updated as events warrant.