Fiscal Policy - Fiscal Straitjacket

Fiscal Straitjacket

The concept of a fiscal straitjacket is a general economic principle that suggests strict constraints on government spending and public sector borrowing, to limit or regulate the budget deficit over a time period. The term probably originated from the definition of straitjacket (anything that severely confines, constricts, or hinders). Various states in the United States have various forms of self-imposed fiscal straitjackets.