It has made a medium-term pledge to restrict spending to a level that would give a budget surplus if output were growing at its full potential (currently reckoned to be 5%).
By freezing or sharply constraining the growth of government outlays, nations were able to rapidly shrinking the economic burden of government, as measured by comparing the size of the budget to overall economic output.
FORBES: Spending Restraint Works -- Examples From Around The World
Broadcasters may then be unable to fund commitments to quality and diversity, and be forced to increase their output of low-budget, advertiser-friendly programming, resulting in a diminished range of free-to-air content.
The Dutch economy, the eurozone's fifth largest, has survived the eurozone crisis relatively well with a national debt of around 65% of economic output but its projected budget deficit falls foul of new EU rules requiring eurozone governments to keep below 3% of GDP.
Greece's budget deficit stands at 12.7% of annual economic output in 2009, more than four times the limit allowed by the E.
The Congressional Budget Office has repeatedly revised down its estimates of America's output potential since 2007 (see right-hand chart).
After surveying the economic literature and Census Bureau data, he sees a multitrillion-dollar gain in long-term U.S. economic output, higher per capita income growth, and lower budget deficits.
The government, which has long played on its AAA rating as a sign of its economic might, has been pursuing a harsh program of spending cuts and tax increases to reduce the budget deficit, which at 7.4 percent of annual economic output is more than twice the EU's 3 percent limit.
The country now needs two more years to bring its budget deficit under the EU's ceiling of 3% of economic output, after the government conceded that weak growth meant the target for 2013 would not be met.
It also estimates that the Irish Republic will be able to reduce its budget deficit from 11.9% of the country's annual economic output (or GDP) in 2010, to 10% this year, 8.6% in 2012, and falling to 2.8% in 2015.
Their annual budget deficit should be below 3% of their gross domestic product (GDP - the total output of their economy).
More importantly, although the service's budget rose in real terms by over 7% a year from 1998 to 2003, its real output rose by only 3.7% a year.
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