Introduction

In 2000, following several successive budget surpluses and projected surpluses “as far as the eyes can see,” Federal Reserve Chairman Alan Greenspan advised policymakers to use future surpluses to retire the debt, prefund the partial privatization of Social Security, and then cut taxes. Instead, Bush administration and Congress would secure deep tax cuts, expand entitlement spending, and initiate two wars that were funded off budget, thereby placing the nation once again on an unsustainable fiscal path. Subsequent events—the financial crisis, the Great Recession, and the COVID-19 pandemic—contributed to the growth of the debt such that within two decades, a declining debt had been replaced with the highest level of indebtedness since World War II. The chapter turns to explore the factors that limit the quality of budget projections and provide an overview of the volume.