Fighting Inflation and Ensuring US Fiscal Health Starts Now

Inflation and rising interest rates will have seriously negative effects on the US fiscal outlook. However, policymakers have options for addressing inflation and for slowing, perhaps even reversing, the trend toward sovereign debt accumulation. But fiscal policies need to be carefully calibrated to ensure that addressing inflation does not trigger deep recessions. Spending needs to be measured, cut where possible, tightened (to promote work and productivity and avoid stimulus), and paid for. And perhaps most importantly, our nation’s leaders need to provide the political will for change.