TY  - JOUR
AU  - Poterba,James M.
AU  - Summers,Lawrence H.
TI  - Recent Evidence on Budget Deficits and National Savings
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2144
PY  - 1990
Y2  - April 1990
UR  - http://www.nber.org/papers/w2144
L1  - http://www.nber.org/papers/w2144.pdf
N1  - Author contact info:
James M. Poterba
Department of Economics
MIT, E52-350
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/253-6673
Fax: 617/258-7804
E-Mail: poterba@nber.org

Lawrence H. Summers
Harvard Kennedy School of Government
79 JFK Street
Cambridge, MA 02138
Tel: 617/495-9322
Fax: 617/495-0436
E-Mail: lhs@harvard.edu
AB  - This paper examines the recent United States experience with sustained budget deficits and concludes that the events of the last five years cast significant doubt on the proposition that the timing of taxes does not affect national savings. Rather than raising private saving, the recent deficits have if anything coincided with reduced saving and increased consumption. These findings suggest that realistic analysis of fiscal policies must recognize that consumers are liquidity constrained and/or myopic.
ER  -