Understanding the federal budget requires distinguishing between the short-term and the long-term fiscal outlooks. In the long term, tax revenues will not be adequate to support foundational programs such as Social Security, Medicare, and Medicaid as the U.S. population ages. Therefore, deficit reduction is an important long-term concern. In the short term, however, deficits are low, and temporarily increasing deficit spending is an appropriate response to a struggling economy. Spending now on new investments such as infrastructure, education, and research helps build the strong economy that will be critical for a stable long-term budget. In the short term, growing the economy and raising wages should be the top priorities, and long-term fiscal issues should not be used as an excuse to block immediate investments to grow the economy.
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