Reaching Primary Surplus: Can It Happen?

by: Brad DeLong

Felix Salmon waxes his moustachios, laughs evilly, sneers, and asks a question:

Felix Salmon: Monday links: Brad DeLong’s dreams of reaching primary surplus - does anybody (including Brad) really believe it’ll happen?

In 2006 and 2007 we had primary balance--and that was even with the Bush administration behaving very, very badly indeed. In 2000 we had a primary surplus of 4% of GDP. So yes, Felix, I believe we can get there. And the CBO baseline has us in primary surplus from 2012 to 2020.

So yes, Felix, with a little bit of luck and PAYGO we can get to primary balance--and then pray that it continues to be the case that g > r.