NVI Technical College Information

Economic Feasibility

These initiatives are likely to have a positive and significant impact

To have a significant economic impact, the shutdown would have to

on public capital in the United States, but they are not a large fiscal

last for longer than any past shutdown, a possibility that is also

stimulus by any means.

included in our recession scenario.

Our baseline forecast assumes deficits will rise to over US$2 trillion

Looking beyond the immediate problems of finance, the earlier

by FY28. That ’ s a hefty amount, one that inevitably raises the

Infrastructure and Jobs Act and Inflation Reduction Act will boost

question of whether the US government can continue to borrow at

government spending over the next 10 years. This spending will

A

such a pace.

increase the capacity of the economy, although it might not show

up as faster productivity growth.

The answer is that it can — at least until investors lose confidence. At

this point, most investors show no sign of concern about the ability

However, much of this additional spending comes toward the end of

of the United States Treasury to repay US debt.

our forecast horizon, and consequently, the short-term impact on

the forecast is minor. Also, the amount of spending is relatively

Eventually, however, the US government will face a crisis if it does

modest compared to the economy as a whole. According to the

not eventually find ways to reduce the deficit and consequent

Congressional Budget Office (CBO), in 2026, the peak year of

borrowing. The crisis may be many years away, and current

spending, the Infrastructure and Jobs Act will add about US$61

conditions may argue for waiting. It would, however, be a bad idea

billion to the federal deficit. That amounts to about 0.2% of

to wait too long once those conditions lift.

projected GDP.

Source: Deloitte

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