Moreover, looking at the long term, we have to bear in mind that political economy mechanisms bias fiscal policy towards incurring deficits. However, in an exceptional crisis things are slightly different and it cannot be denied that discretionary fiscal policy had a stabilising effect.
The combination of an aging population and the soaring costs of its medical care is certain to place enormous demands on our nation's resources and to exert pressure on the budget that economic growth alone is unlikely to eliminate. To be sure, favorable productivity developments would help to alleviate the impending budgetary strains.