Still reading lots of 'fiscal Armageddon' takes about the fiscal path over the next few years.

Reality check from @ScotiaEconomics. We are on path toward deficits at around 1% of GDP which is a level that is perfectly sustainable if we can keep it there.
To keep the deficit and debt sustainable, there are some long-run challenges we can't ignore:

-> Need stronger GDP growth.
-> Need to plan for big growth in health expenditures over next 20 years.
-> Need to ensure other spending is responsible.

More on this from me anon...
Anyway, for those lighting their hair on fire over fiscal policy, you should really look at this chart showing the actual path we're on. Do we really need to cut back fiscal balances even more aggressively than this in the short term?

If you need an example of the kind of thing that's hard to understand when you look at the data, here is a whole opinion piece based on the premise that our fiscal picture is "deteriorating" and we're headed for a late 1970s-style blowout.…

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More from @kevinmilligan

27 Oct
Federal budget watchers, it's time to check in on what recent developments may mean for the track of the federal budget balance....a short thread....
Revenues are driven by *nominal* income growth. What's reported on T1, T2, and all the tax forms is your nominal, not-inflation-adjusted income. So, if you're interested in what's going on with tax revenue, look at nominal income growth. That's roughly: real GDP growth+inflation.
The Spring 2021 budget had the following projections for nominal GDP and the broad measure of inflation used for GDP (the GDP deflator)....2021: 9.3 nominal GDP growth and 3.3% GDP deflator growth.
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