Northwestern University Economics Professor Paola Sapienza says any savings from budget cuts could become irrelevant, if the U.S. defaults on its debt, or receives a credit rating downgrade.

The budget deficit reached a yawning 9.4% of GDP in 2006; Neil Shearing of Capital Economics, a consultancy, reckons it may be down to as little as 3.5% by the end of 2008.

This thesis attempts to analyze the merits and demerits of the current budget control system through combination between the theory of Public Economics and Public Management Science.