Is Budget Deficit correctly measured? 3. Uncounted liabilities Current measure excludes some important govern liabilities e.g. pensions of govern. workers social security system contingent lia bility
6 Is Budget Deficit correctly measured? 3. Uncounted liabilities Current measure excludes some important govern. liabilities e.g. pensions of govern. workers social security system contingent liability
Is Budget Deficit correctly measured? 4. Business cycle Recession Tax income decreases Transfer increases Budget deficit increases Change in budget deficit depends not only on govern policies, but also on business cycle
7 Is Budget Deficit correctly measured? 4. Business cycle Recession: Tax income decreases Transfer increases Budget deficit increases Change in budget deficit depends not only on govern. policies, but also on business cycle