Budget

As the U.S. financial crisis unfolded, President Bush and members of Congress authorized on Oct. 3, 2008, a rescue package called the Troubled Asset Relief Program (TARP). Many policymakers believed that the U.S. economy was, in the words of Federal Reserve Chairman Ben Bernanke, on the verge of ‘‘a cataclysm that could have rivaled or surpassed the Great Depression.’’

In recent years, the issue of ballooning national debt has surfaced in a variety of countries around the world, and the United States, of course, is no exception.

Recent research has produced a variety of theories and insights that apply to this issue, and much academic scholarship looks to draw lessons from economic history. Here are some relevant studies and working papers.

U.S. policymakers find themselves engaged in an often intractable and largely polarized debate about the size of government and its relationship to overall economic growth. A cause (or perhaps symptom) of this partisan polarization is a number of studies with highly variable results on the impact of government size on economic growth.

The U.S. government regulates many sectors of the economy and American life, from health and the environment to energy and food, and most rules come with tradeoffs. For example, regulations that ensure food safety or clean air — which may prevent future health or other costs — may also raise compliance costs for businesses. As the administrative state and the number of regulations have grown, the proper scope of regulation has been a topic of continuous, and often contentious, debate.

The death of Osama bin Laden and the 10th anniversary of the 9/11 attacks have prompted public reflection on the costs, both political and economic, of the wars and counter-terrorism operations that have taken place during this era.

Public debt levels in many of the world’s advanced economies, including the United States, have risen to levels not seen since World War II. History suggests that reversing this trend will not be painless and will require a number of years to accomplish. Indeed, the examples of debt crisis and bailouts in countries such as Greece, Ireland and Portugal may portend a difficult future for other countries.