To the author and many other observers, the downside risks to assumed economic growth rates seem more serious than the upside risks. Individual forecasters each have their own favorite causes of concern. The author's is the increasing dependence of growth in national output on money from abroad. Centuries of economic history suggest that other nations will not subsidize the consumption of one nation to that extent indefinitely. While the projections assume an inflation rate , the projections of structural deficits are largely insensitive to assumed rates.
Inflation has nearly equal impacts on spending and revenues.
Federal Budget Assumptions Assumptions about the federal budget affect higher education planning in two ways. First, the assumptions affect presumed federal outlays for higher education made directly in the form of Pell grants and other programs. Second, the assumptions affect presumed state and local outlays for higher education through the impact of federal spending on the fiscal position of state and local governments. On the one hand, actions in 1998 suggest this report's assumptions in this area will be easily realized. These projections assume that federal aid to state and local government will simply remain a constant percentage of personal income.