The Revenue Gap and How to Close It
Louise Sheiner, a senior fellow at the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, opened by challenging the premise that mounting debt points inevitably toward sudden collapse. She argued that the primary effect of rising debt is a gradual reduction in future living standards rather than a looming catastrophe.
“It’s a slow, moving, gradual erosion of future living standards,” she said. “It’s not crisis or catastrophic.” Sheiner said the greater risks to fiscal stability are political rather than arithmetic, including threats to Federal Reserve independence, the credibility of statistical agencies, and the rule of law.
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