Budgeting for existential crisis: The federal government as society's guarantor

F. Stevens Redburn

Public Budgeting & Finance, 2021, vol. 41, issue 3, 5-21

Abstract: Onset of the coronavirus disease 2019 pandemic produced a fiscal shock of almost unprecedented scale and suddenness. Procedurally, the exigencies of responding to such crises make a mockery of the apparatus of normal budgeting. Standard near‐term constraints and targets for fiscal choice lose utility as guides for budgeters; extraordinary procedures are invoked. Assessing the initial fiscal response reveals the extraordinary role the federal government plays during such a period as ultimate guarantor of the economy and social order. The federal government has constitutional responsibility and, under duress, is the only set of institutions with the capacity to play this role. Federal responses to ordinary emergencies generally assess their contribution to relief and recovery. In an extraordinary emergency such as the pandemic, responses may be assessed for their contributions to two additional policy objectives: readiness and resilience. An event of this magnitude also offers an opportunity to reconsider the aims of fiscal policies and whether the terms for measuring and judging policy outcomes are appropriate for such a period. The standard budget baseline lacks a component for the average multiyear cost of the federal government's exercise of its role as societal guarantor. The standard metric for judging fiscal policy—public debt as a percent of gross domestic product—is problematic as a fiscal policy target. An alternative would capture changes in public sector net worth, highlighting the net fiscal and economic benefit or cost of any policy to borrow in order to invest in long‐term policy objectives.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/pbaf.12300

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:pbudge:v:41:y:2021:i:3:p:5-21

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0275-1100

Access Statistics for this article

Public Budgeting & Finance is currently edited by Philip Joyce and William Simonsen

More articles in Public Budgeting & Finance from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().