The country is facing a 2009 federal deficit of $1.42 trillion, more than three times larger than any annual deficit in history. To get the country in the black for the year, every man, woman and child would each have to write out a check for $4,700. That’s a lot of money. According to the Government Accountability Office, 20 years from now, about 92 percent of every federal dollar will be spent on entitlement programs and interest payments on the federal debt. The federal government has only a few choices: increase revenue (raise taxes), reduce expenses (cut services) or a combination. And Congress is elected by a nation of voters who want to have it both ways: low taxes coupled with generous, federally funded programs. Yet we wonder why the national debt grows. So while the 2009 deficit is a stunning $1.42 trillion, the real question is whether it’s stunning enough to finally prompt Congress to make changes when the economy recovers. — Des Moines Register editorial
Remember Ross Perot? In 1992, he predicted that the federal budget deficit was on track to end the world as we knew it. In fact, the rapid growth of the economy during the following years reduced the deficit to zero. Deficits and debts mean just about nothing anyway — at least out of context. In 1945, the federal debt was 120 percent of the entire U.S. economy. A few years later, the debt as a proportion of GDP had been tamed — and not primarily because of cuts in government spending. Yes, of course — wartime spending ended. But the big change was in the denominator of the equation. Economic growth kicked in big time, and reduced the debt as a proportion of the economy to manageable levels. I’d prefer the government run a larger deficit. With unemployment and underemployment rising, the federal government has to spend more — and the deficit has to be larger — in order to get people back to work. — Robert Reich, RobertReich.blogspot.com
