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Structural Deficit

Structural Deficit

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ViennaSausage posted on Sat, Oct 17 2009 8:10 PM

A Structural Deficit is a mainstream term.  But WTF is it?  Does it really exist?

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Answered (Verified) Stranger replied on Sat, Oct 17 2009 8:57 PM
Verified by ViennaSausage

Government finances are structured such that tax revenue plummets during recessions (taxing profits and incomes). It is therefore normal for a deficit to appear temporarily. When profits and employment recover, the budget of the government should return to the black.

If instead deficits persist after a recovery, or there is no recovery, then there is a structural deficit in the structure of the budget.

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