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Fact-based, data-driven research and analysis to advance democratic debate on vital issues shaping people’s lives.
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February 2004, Dean Baker
This paper examines the effect of the rising current account deficit on the budget deficit. It notes that as foreigners own more U.S. financial assets, the government forgoes taxes on income from these assets. This fact calls into question the CBO’s budget projections, which don’t assume any impact of increased foreign indebtedness on tax receipts.
