Several proposals to reduce U.S. debt reveal large differences in their targets. We examine how an unknown debt target affects economic activity using a real business cycle model in which Bayesian households learn about a state-dependent debt target in an endogenous tax rule. Recent papers use...

The U.S. faces exponentially rising entitlement obligations. I introduce a fiscal limit -- a point where higher taxes are no longer a feasible financing mechanism -- into a Perpetual Youth model to examine how intergenerational redistributions of wealth, the average duration of government debt,...