Mounting U.S. Debt Makes Fiscal Crisis More Likely

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Now, listen, I promise I'll pay up, I just…need to borrow a little more money from over here…

How's this for a cold open? "Over the past few years, U.S. government debt held by the public has grown rapidly—to the point that, compared with the total output of the economy, it is now higher than it has ever been except during the period around World War II." That's the depressing first line from the Congressional Budget Office's new report on how America's crushing debt-load increases the long-term likelihood of a fiscal crisis. Without significant policy reforms, the report warns, "growing budget deficits will cause debt to rise to unsupportable levels."

But right now, those reforms are nowhere to be found. Using the rosiest possible assumptions, the administration admits the country's debt-to-GDP ratio will hit 77 percent by 2020. The CBO, more pessimistically, says we'll hit 90 percent over the next decade. (Incidentally, this is one of the reasons to pay close attention to the CBO; it's not a perfect check, but it helps keeps the administration, which has greater incentive to be overly optimistic, honest.) And those figures only account for publicly held debt. If you tally up gross government debt, the CBO expects us to hit 94 percent this year.

It's all very grim—in part because high debt levels tend to stifle investments elsewhere. And in part, as the CBO says, because "a growing level of federal debt would also increase the probability of a sudden fiscal crisis." As long as debt's growing, in other words, the risk of a fiscal crisis grows too.

Moody's, which rates investments, has already indicated that the U.S. is on its way to losing its credit rating—a signal that investors may be beginning to consider the U.S. less of a sure thing. As the CBO report notes, "investors become unwilling to finance all of a government's borrowing needs unless they are compensated with very high interest rates; as a result, the interest rates on government debt rise suddenly and sharply relative to rates of return on other assets."

President Obama and his economic advisers have more or less acknowledged the problem. But what have they done? Not much: The White House budget fails to meet the president's own stated deficit reduction targets, choosing, instead, to cross its fingers and hope that a fiscal commission assigned to study the problem will swoop in during December and save the day. Does anyone in Washington really think presidential commissions work? Can we set up a presidential commission to study the question?

NEXT: A Rhee of Hope

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  1. Suddenly, I don’t feel so bad about carrying a balance on my credit card.

    1. Suddenly I feel a lot stupider abut never carrying a balance on my credit card.

  2. Accounting is racist.

  3. But… but… MULTIPLIERS!

    1. Multipliers Boy – The plucky sidekick of our hero, The Deficit Commission. At his side as he swoops in to save the day!

    2. Zero is a multiplier.

      1. So is -1.

  4. ‘Moody’s, which rates investments, has already indicated that the U.S. is on its way to losing its credit rating?a signal that investors may be beginning to consider the U.S. less of a sure thing.’

    So, of course, in Britain lefties are calling for ratings agencies to be banned. So yeah.

    1. I thought they asked not to be quoted on that…

  5. Arthur Laffer is still standing by his phone waiting for Obama’s call.

    1. He should get a cell phone so he can move about while waiting. I wouldn’t recommend he hold his breath, though.

  6. the debt crisis is a feature of the Obama program not a bug. It becomes an excuse to have the European levels of taxation and thus control that Obama and his minions have always dreamed of. Never let a crisis go to waste.

    1. I was in a meeting with a senior executive of a Russian company about a decade ago. We were discussing how to avoid a crisis in our project. He stopped the discussion and said that crises were important to doing businees. “How else do we earn all these medals on our chest?”

  7. A chinese rating agency recently stepped out and said the US was insolvent. Moody’s seems behind the curve as usual.

    http://www.ft.com/cms/s/0/5632…..ab49a.html

    1. Yeah, Moody’s is a big part of the reason why I refuse to be a part of the cult of Warren Buffett. They either never saw the problem piling up with the layered mortgage backed securities or knew about it and lied.

      It looks to me like the tail is still very much wagging the dog on Wall Street.

  8. Without significant policy reforms, the report warns, “growing budget deficits will cause debt to rise to unsupportable levels.”

    I know this will come as a shock to everyone here.

  9. We are all so fucked.

  10. Soo… Once again anything said by the Executive branch is no longer binding once out of their mouths. You’d think even by random chance they’d end up keeping their promises by accident once in a while.

  11. Feels more like the debt is mounting me.

  12. Any word from the Krugster on this?

    1. He’s defending huge levels of debt. Shocking.

      For those who don’t want to click… He asserts that high levels of debt have nothing to do with the low growth of the Japanese economy.

      1. SugarFree: Reading the Krugster so we don’t have to.

        You simply aren’t getting paid enough.

      2. Actually, no, he’s saying the high levels of debt are the result of low growth, rather than the other way around.

        1. It’s still not a justification for carrying high debt, which is his whole point. The solution staring him–and you–in the face is and always will be cutting spending.

          The economy doesn’t exist to fund the government.

          1. Cut what spending? I’m all for targeted spending cuts. What I’m not for is keeping unnecessary, completely pointless tax cuts for the rich at the expense of the poor, middle class, and elderly. What’s so wrong with Clinton-era or even Reagan-era tax rates?

            1. Never say the “T” word again.

            2. unnecessary, completely pointless tax cuts for the rich at the expense of the poor, middle class, and elderly

              You mean those poor and middle class folks who pay no income tax and often get refundable credits – i.e., money from the federal government they did not pay to it in the first place?

              How are the reductions in top marginal rates for those who pay them “at the expense of” those people?

              What’s so wrong with the federal government adhering to its limited, enumerated powers, as intended by “the people” when it was created?

              1. WTF,

                Because the alternative is cutting entitlement programs right?

                I mean that’s what this is all about… busting the budget so we’re forced to get rid of the evil New Deal once and for all.

                1. Because the alternative is cutting entitlement programs right?

                  What’s wrong with that? Warren Buffet, Ted Turner, Tony Hayward, and John L Morris have enough money. They don’t need more of the pittance we have.

                2. Damn right. Throw those old people into the streets. Let the kids starve. If they want to eat, they can mow my lawn or shovel my driveway.

                  1. I actually knew a kid who shoveled his lawn. Big football player / fan.

                3. Because the alternative is cutting entitlement programs right?

                  No, it’s about reducing headcount. Every organization that sees dramatic drops in revenue does it except the dysfunctional ones.

                4. You such a dishonest douchebag Tony. Entitlements don’t have to be cut to balance the budget, just slow down their growth and the budget will balance. You really think out of control spending by the government has nothing to do with the debt?

                  1. Mr. Bentley,

                    Of course spending has to do with it. Why are, say, $700 billion in useless tax cuts not considered part of the equation?

            3. Cut it fucking all. Reduce it across the goddamn board. Means-test Medicare and Social Security. Cut the military, cut federal law enforcement, cut it all.

              The simplistic mistake you always make is thinking that everything here is a Republican. I know why you do it, because you don’t actually have to make an argument, just spout diatribes about Fox and Beck. But we’re not all not. The debt has nothing to do with tax “cuts” on the rich or the huddled masses yearn to live off my productivity. Cut it all.

              1. There ya go.

                I’m betting you (Tony) have very little idea just how many fucking programs, departments, divisions, offices, etc., the federal government has – just how much money gets spent on absurd, ridiculous bullshit.

                It’s not an all-or-nothing, dichotomous proposition. It’s not “either tax the rich or cut entitlement spending for the poor and elderly.”

                I don’t know if they finally killed it, but for years and years, the federal government had an office of the official tea taster and grader – seriously. An office of people whose job it was, paid by federal funds, to taste teas and make sure they met whatever grade they claimed to be. Or some such nonsense. A teensy, tiny fraction of the federal budget? Indeed. But add up dozens of such idiotic federal offices – a few million here, a few million there, a billion here, a billion there, and soon you’re talking real money.

                So fuck yes, cut spending.

                1. WTF,

                  Outside of defense, entitlement programs, interest on debt, and the Bush tax cuts, anything you’d focus on would be a pittance. Anecdotes about expensive toilet lids are evocative but not all that relevant.

                  1. Tony,

                    I have a friend who works at the Federal Department of Energy. She reviews green energy proposals to pick which companies receive federal grants to research green technology. There is no reason the federal government needs to be involved in funding research. If a technology really works, investors will put up their own money funding bringing that tech to market so that they can profit from it’s success. The Department of Energy employs ~ 16,000 FTE, another ~90,000 contract and has an annual budget of $24 billion.

                    I know in the face of a ~ $1.5 trillion deficit $24 billion isn’t much, but it’s a start.

              2. If you’re going to means test SS at least let me know what the test is going to be so I can know how much to spend now instead of invest and still end up with the same level of retirement income.

                Rather than not getting anything for the 12.4% of my wages I paid my entire working life I can ratchet up my current consumption to prevent that from happening.

            4. So if I understand you correctly, you’re advocating removing the 10% bracket and restoring that income range to the previous 15% rate?

          2. The gummint is like Bizarro-BASF: We don’t actually make anything that you use. We just make everything worse.

        2. If that’s what he’s saying, he’s still wrong.

  13. “Over the past few years, U.S. government debt held by the public has grown rapidly?to the point that, compared with the total output of the economy, it is now higher than it has ever been except during the period around World War II.”

    Heh. The lefties will probably burble that WW II was a great time, the great FDR was prez, so what’s the big deal?

  14. We’d better get our fiscal house in order soon, or there’ll be hell to pay. This gives the GOP Congress that’s coming every incentive to kill programs, subsidies, and God knows what else. Odds are they won’t, but avoiding economic disaster gives them political cover to do that for once.

    1. This point should be 2 things:

      1) Not underestimated.
      2) Shouted from the rooftops by any non-liberal to try and force the republicans in to doing so.

      As you said they probably won’t, but we need to try. They have political cover to finally get rid of these accursed programs. Anything less than 1/3 of the budget being cut is a joke.

  15. I’ll sub in for Warren:

    Doom.

  16. {sung with kitschy musical flair}“We’re gettin a Newwwwwwww deal, we’re gettin a Newwwwwww deal..

  17. Any libertarian with the balls to support letting the Bush tax cuts expire, or is everyone gonna continue braying about a problem they have no intention of offering real solutions for?

    1. Or is anyone stupid enough to argue Tony’s strawmen points?

      I’m not going there. And any libertarian that argues for the expiration of tax cuts is by definition not a libertarian.

      1. Then why should libertarians be taken seriously?

        1. Milton Friedman: “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, “How do you hold down government spending?” Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.”

          1. but reducing taxes doesn’t reduce spending. that’s why we have gargantuan debt. am i missing something?

            1. No, you’re right. Even if you cut your overspending kid off from cash, the problem remains if he still has a credit car.

              I imagine it won’t stop until we are such a busted out piece-of-shit country that no one will loan us money any longer. Greece 2.0.

              1. Well, Greece did come up with that whole democracy thing, so it does stand to reason…

            2. It’s true that reducing taxes may not reduce spending, but Friedmans point is that the last resort for limiting the amounts that government could potentially spend is to prevent them from taking the money in the first place.

              1. Fiscal recklessness is not a policy. The goal is to gut and destroy widely popular social programs for no good reason. That anyone is still peddling starve-the-beast rhetoric given the income gap in this country is ridiculous.

                1. Fiscal recklessness is not a policy.

                  It’s right there in the first plank of the Democratic Party manifesto.

                2. There is a good reason. The reason is that they’re fiscally reckless. Reverse the Bush tax cuts and the problem will still be there. What then?

                  1. The Bush tax cuts came with an expiration date. Why? Because they wouldn’t have been allowed under reconciliation (remember that?) given the huge deficits they were projected to cause.

                3. Yes, it’s being done for “no good reason”. That’s brilliant, Tony.

                  Income gap? Can you believe that some people make a little money and some people make a lot of money–especially in a country like the U.S.? If we could only narrow that gap to a level that YOU find acceptable, we’d all be better off, wouldn’t we?

            3. Eventually people will stop buying the debt, and they’ll have to pay higher interest on it. Or alternatively print more money, which will piss everyone in the country off as the purchasing power of their incomes and savings are annihilated, not to mention the bondholders who are paid back in diluted currrency.

              Hopefully defecits caused by lower revenues force government spending into the public eye, and voters to examine the question “do I want to pay more taxes to fund this spending?”. As you’ve noted, it doesn’t seem to be going smoothly at the moment :-/

              1. Printing money is good for the employers, since they don’t have to cut nominal wages to give people pay cuts — in fact, they can give people raises with a built-in pay cut!

              2. I would agree with this except the rest of the civilized world is more screwed than we are so by comparison, our bonds still look like gold.

          2. Unfortunately, “starve the beast” doesn’t work any longer. The beast will eat everything that it has and then escape by digging a hole under the fence and then eat everything at the Chinese restaurant down the street.

            1. And then be hungry again an hour later.

              1. “I’ll have 1 billion Pu-pu platters!”

                1. That’s a lot of pu.

                2. It’s trillion now. Billion is passe.

              2. I know funny and that was funny! thanks,
                -Tim

    2. I should know better to respond, but stay with me here. It’s a very complex solution that will take years and cost millions of lives, but it will be well worth the effort:

      Cut spending. Now.

    3. It doesn’t take balls to support letting the tax cuts expire, only a lack of brains.

    4. Any libertarian statists with the balls to support letting the Bush tax cuts expire cutting spending, or is everyone gonna continue braying about a problem they have no intention of offering real solutions for?

      FTFY

      1. Eliot Spitzer proposed this in a column today:

        “First, adopt a carbon tax (supported by virtually all in the environmental community and some conservatives as well; see Pete Peterson in the Wall Street Journal). Second, offset the revenues from the carbon tax with a reduction or even elimination of the payroll tax for all new hires. Third, increase the retirement age for Social Security one year for every two calendar years over the next six years (a net increase in three years on the retirement front), and start to put in place some obligation for the wealthiest to pay more for Medicare. These are simple but necessary bargains.”

        1. “Forth, find some high quality hookers. Not your beaten-down old whores, but the really nice, young ones that don’t have stretch marks yet. You generally can get to the front of the line by threatening to expose them to your anti-prostitution task force.”

          1. lol, +1. Tony isn’t too smart.

        2. So the carbon tax-payroll tax offset is basically a shift to a consumption tax…with that logic, why not just do a flat VAT and avoid the whole stupid round trip between individuals, the IRS and companies?

        3. I don’t see any spending cuts there.

          1. perhaps Spitzer meant for taxpayers to cut their spending?

        4. increase the retirement age for Social Security one year for every two calendar years over the next six years (a net increase in three years on the retirement front)

          While this would make no difference to me since I’d rather retire at 55 and know I lost a percentage of my money to a ponzi scheme than wait until the current age, getting others to buy into the ponzi scheme is still seriously screwed up.

          Give people a choice to never receive benefits by opting out of paying in to begin with.

          1. Give people a choice to never receive benefits by opting out of paying in to begin with.

            I’d agree with this, but then you’d have to be willing to let die of starvation those who opted out and still spent irresponsibly their whole lives. It suffers the same problem the healthcare issue does. A civilized society won’t be able to stomach letting large numbers of people, no matter how irresponsible, die due to financial reasons, so you’d pay for them anyway.

            1. “I’d agree with this, but then you’d have to be willing to let die of starvation those who opted out and still spent irresponsibly their whole lives.”

              If only there were people with enough of a charitable spirit to provide the support these people would need to keep them from starving to death.

              1. I’m sure charity would help, but charity is not manditory so if there happens to be not enough charity, what then? I’m on your side, BTW, I want smaller gov’t low taxes, low spending, etc., but this is an issue that needs a solution if we were to totally privatize retirement. It wasn’t as big an issue back in the day when the average life expectancy was age 63 and nearly everyone had lots of kids to help take care of them. Now people live to an average of 78 and may not have any kids.

    5. Yup. The balls to do nothing. That’s pretty much the problem.

    6. The solution is across-the-board cuts in taxes and spending.

      1. The only thing that is a solution for is you having to think too hard. Maybe there are some things that need more money, maybe there are some things that need to be cut. Why punish the fiscally sound programs and reward the wasteful ones with an across-the-board cut?

        1. What’s your definition of “fiscally sound programs”?

          1. Medicare and SS are remarkably efficient. Defense is of course the biggest waster by far. But for some reason it’s easier to attack social welfare programs than our imperial war machine. Wonder who’s to blame for that.

            1. I’m happy to attack both.

            2. Medicare and SS are remarkably efficient.

              HAHAHAHAHAHAHAHA

              1. Ooh, fun game. How ’bout:

                Some areas of the Sun’s surface are remarkably cool.

            3. But for some reason it’s easier to attack social welfare programs than our imperial war machine.

              Republicans attack the social welfare programs, Democrats attack the imperial war machine, and libertarians attack both.

              What’s easier about attacking social welfare programs? About the same percentage of the country does it as for war.

            4. Maybe that reason is that Medicare and SS are going to swallow the entire budget if they aren’t reined in. They simply aren’t sustainable.

            5. Medicare and SS? There’s absolutely no way you really believe this. I have determined that Tony comes here and just says these things to piss us off.

            6. They all need to be cut. SS/Medicare need to be means tested and have the eligibility ages raised by at least 4 years. The military needs to be pulled back from all over the world.

              1. If they’re going to means test SS they need to give me enough lead time to spend down my portfolio and use SS to replace the income from that money, depending on how the test is structured.

            7. I’d cut the imperial war machine, probably to an extent that you couldn’t stomach. But let’s get real, Tony: look at the history of the 20th century. Democratic presidents are just as big warmongers as Republicans; in fact the Republicans are more than a little behind on this infamy.

              Can you really imagine the Democrats going without their “humanitarian interventions”? Can you really imagine Democratic senators giving up big “defense” projects in their states? Really?

              So, what we’d get are the tax hikes–and nothing else. Well, we’d get something else: the new tax receipts will be spent on new programs that “just can’t wait”.

        2. And which of these magical government programs are fiscally sound? I’d bet you can’t find 5 in all of the federal government.

          1. Fiscally sound government program is an oxymoron. They maybe a few that live within their budgets, but that it an arbitrary line. Their budgets have no analogs in normal business operations.

            I see this in libraries all the time. The library is a dead loss. It doesn’t make any money, it doesn’t put any money in the economy that wasn’t already there, and it doesn’t produce a profit when it raises circulation statistics.

            A fiscally sound government program is a arbitrary arrow fired at an illusory target that lets people yell “Bullseye!” for no rational reason at all.

        3. The government can and should be just as effective at managing resources as any private business.

          The general operating conditions of the last two years have lead to these typical objectives for any given manager:

          – Cut your budget by 5% to 10%
          – Get all your work done
          – Keep your customers happy

          Otherwise, you’ll be fired.

          It seems to work out here in the real world Tony. No reason it can’t work at the federal government as well.

        4. There are also programs that need to be eliminated. For example what the fuck does the Dept. of Education do, at least that isnt already the responsibility of state and local school systems? Why do we need a Dept of Transportation when we already have a commerce dept.? Why do we need a dept. of “homeland security” when we already have the military, the FBI/DEA/CIA/SS and a dozen other alphabet federal LE agencies??

          And after the housing fiasco can anyone even rationalize not doing away with HUD?

    7. Congressman Paul Ryan has already created the plan that would bring the long-term budget into balance without massive tax increases. I’m not going to explain the details, you can go look into it yourself if you’re interested, which I know you really aren’t.

      1. Actually his plan, such as it is, increases the deficit more than Obama’s budget, but thanks for playing. You’re just not serious about debt if you can tolerate no tax increases on anyone, anywhere, ever. Why don’t any of you see how insane that is?

        1. Because they’ve never cut spending significantly. Cut the whole shebang for 10% and make it actually hold for a year, and I’ll support a tax increase to sunset when debt gets under 20%.

          The government is a money junkie, forever promising to kick tomorrow if you just give them a fix today. Never trust a junkie.

        2. Admittedly the Ryan plan does not balance the budget within the next couple of years; it’s a LONG-TERM plan, which is what we need the most.

          “[Paul Ryan’s plan] would make the Social Security and Medicare programs permanently solvent (and) lift the growing debt burden on future generations.”

          -Congressional Budget Office

          1. The problem with long term plans is that most of the pain/sacrifice is put off to the future. No legislator wants to tell his constitutents to do without when it’s easier to kick the can down the road and let a future Congress deal with it.

            1. I agree, but the problem is that the government has gotten so completely out of control in the last few years that realistically there is just no short-term way to balance the budget quickly without completely destroying the economy in the process.

        3. Because the major problem is spending, and not a single politician has seriously considered cutting it in any meaningful way, yet you want us to support tax hikes?

          I have no doubt that hikes at some point will be necessary, but that’s step 862, with steps 1-861 all involved with cutting spending.

          There’s no use trying to replace lost blood in a patient until that gaping fucking wound that cause said loss of blood is taken care of.

          1. What spending? Bonus points for suggesting things that are politically possible.

            I’m all for spending cuts where necessary. Let’s start with defense. But I’m apparently the only one hear who things that revenue is part of the equation.

            1. hear who things? I’m getting senile. here who thinks*

            2. What spending?

              All of…

              Bonus points for suggesting things that are politically possible.

              Well, there’s the rub. It’s all politically impossible because most people want their pet issues taken care of and most people believe that others’ pet issues should be outright chopped… as opposed to a percentage of cuts across the board. That’s exactly the problem.

        4. Oh, also, the Obama budget is a huge steaming pile of bullshit. The numbers are made of unicorns and pixie dust.

          1. No more so than Ryan’s.

    8. I’m guessing the obvious answer, cut spending, isn’t considered a real solution.

    9. Is it even possible to raise taxes enough to balance the budget? I haven’t heard that as a solution.

      1. Nope, not if total federal spending is going to remain in the neighborhood of 30% of GDP, it’s not even close to possible.

        Tax receipts by and large since World War II have shown pretty remarkable stability regardless of the actual tax rates. They do go down somewhat in economic downturns like what we’re having now, but even in economic good times you’re not going to get anywhere close to 30%.

    10. Hey, stoopFuck, there are DEMOCRATS in congress who want the Bush tax cuts extended.

  18. I can actually see some type of fiscal crisis on the horizon. To get a clearer picture of the US debt, it is best to study the local, state, and federal government CAFR’s. I am not really looking to what the basic national media and interviews are telling me. I am more of an analytical person who loves to deal with facts and figures.

  19. choosing, instead, to cross its fingers and hope that a fiscal commission assigned to study the problem will swoop in during December and save the day.

    Thus the reason I wouldn’t vote for Obama under any circumstances. “Hope” isn’t a thought-out plan. I know 90% of the population thought of “hope” in a positive light, I thought of it as a sure sign that he was clueless and hope was all he had left. On an individual spiritual level, hope is a great thing; on an organizational leadership level hope is idiocy.

  20. [PL notes:] We’d better get our fiscal house in order soon, or there’ll be hell to pay.

    I agree, and am quite interested in hearing from Reasonoids scenarios about *specifically* how TSHTF. I think it will be triggered by a natural disaster followed by martial law, food riots, and tax revolts.

    “We’d better get our fiscal house in order soon.” Like, as some ladies say, soon-soon. 8-(

  21. It’s like arguing with a dial tone. I give up.

  22. Years ago I saw a proposal that pops back into mind once in a while.

    Freeze Federal hiring. Then, every year, *randomly* lay off 10% of the workforce. Those fired receive as pension the first year their full salary; each subsequent year it is reduced 10%.

    Balls?

  23. The RC Dean plan for balancing the budget:

    (1) All agencies are funded at their 2003 levels. You can phase this in over two years if you want.

    (2) All unspent stimulus funds are taken off the table and used to retire debt.

    (3) All European military bases are closed. All other bases are up for review, with a goal of having only those bases that are logistically necessary for force projection of units based in the United States.

    (4) On the tax side, all “refundable” credits are eliminated. A revenue-neutral Reagan-style simplification is taken, to eliminate tax code social engineering and “permanently” lower marginal rates.

    (5) Entitlement reform – Medicare, Medicaid, and Obamacare are replaced with a voucher for a catastrophic care policy.

    That should do for a start, no?

    1. Does that include pulling out of Iraq and Afghanistan, and putting a freeze on all non-maintenance contracts?

      1. Does that include pulling out of Iraq and Afghanistan,

        Not necessarily, no.

        putting a freeze on all non-maintenance contracts?

        Not necessarily, no. The agencies have a global cap at their 2003 budget level. If they can afford non-maintenance contracts under that cap, go nuts.

    2. Seems rather generous. Who could disagree?

    3. Let me guess: Tony will remain silent on RC’s proposal.

    4. A revenue-neutral Reagan-style simplification is taken, to eliminate tax code social engineering

      No can do.

  24. Tony,

    Fact check.

    Explain how increasing spending from $2.7T in 2007 to $3.5T in 2009 isn’t a major contributor to the deficit.

    Explain how that increase is all entitlement spending.

    Explain how that increase is all one-time spending, given that projections through 2015 are constant escalations (with the exception of 2012).

    Explain it. This is a spending problem. Yes, reducing tax rates has further exacerbated the issue. But the lead cause is spending.

    1. I don’t have a spending problem, I have an earning problem.

  25. “Over the past few years, U.S. government debt held by the public has grown rapidly?to the point that, compared with the total output of the economy, it is now higher than it has ever been except during the period around World War II.”/i>

    Does this mean I’ll have to sit through a “buy bonds” commercial the next time I go to a movie?

  26. “Over the past few years, U.S. government debt held by the public has grown rapidly?to the point that, compared with the total output of the economy, it is now higher than it has ever been except during the period around World War II.”

    Paul Krugman says it’s still not enough.

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