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Budget Deficit: Biggest Since World War Two?

January 6, 2009 RSS Feed Print

Shouldn't we, like, start caring about the budget deficit at some point. This, from Stan Collender:

Based on the information available so far, it appears as if the tax cuts and spending increases in the stimulus plan will be close to or exceed $800 billion by the time it is enacted. Some of that spending will occur over two years. Nevertheless, the package will be big by almost any standard. And this will be on top of the very large $700 billion Troubled Assets Relief Program that many gagged on while Congress held its nose and adopted it last year.

When added to the TARP and everything else that has already been approved or which, like the American International Group bailout, was done by executive fiat, the fiscal 2009 deficit will very likely exceed $1 trillion. Depending on how certain budget scoring disputes are settled, it could be several hundred billion dollars higher.

That means the deficit could be from 8 percent to 9 percent of gross domestic product, a level that hasn’t been reached since the government was borrowing to pay for World War II. Federal debt held by the public could increase by about $2 trillion in 2009, a 25 percent to 30 percent increase over the current level. Even with the much lower interest rates of the past few months, that will raise the government’s annual interest payment substantially.

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Back in 1964, future President Ronald Reagan said that it was "a time for choosing" - and it was not about left or right it was about "up or down". The upward coarse would be one in which liberty expands, is constantly on our minds, and the founding principles of our great Republic are kept intact. As we all should be gravely concerned, there are elements within both the Democratic and Republican parties that have been taking us on a downward coarse - a coarse that takes away our liberties, increases the power and influence of government over our lives, creates unhealthy relations between big government and big business, subverts our Constitution and the rights the Framers granted to individuals, states, and commercial entities.
The Neocons that hijacked the Bush Administration and the most "progressive" liberals within the Democratic party profess different ideas, but have equally flawed ideologies, tactics, and are equally corrupt. The Neocons have bloated the government, increased federal spending, and made very thoughtless foreign policy errors. The extreme liberals want to take away our liberties in the name of "economic security" and "equality". The liberals have been having a field day lately in which they can derride the "free market" and "conservativism". In reality, the problem with our economy is not the market, it is the urge to use government control - our economy is mixed; we have elements of the market, but more and more Corporatism and Socialism are taking over. And the "conservativism" that has gotten us into trouble, the blind ideology and unrealistic global agenda of the neocons, is not traditional conservativism by any stretch of the imagination.
These elements are quite different, but both believe government control of our lives is acceptable and even desirable. I would disagree... and I hope Obama understands America better than what his most liberal supporters led me to believe during the election. We went through eight years of big government mismanagement and excess - we could use a break from these excesses. As far as these deficits are concerned, they are unacceptable. They may give the smokescreen of economic stabilization in the short run and may bring aid, but with the impending entitlements crisis, it will put us in an even worse financial position. We need to spend and provide tax cuts wisely, not engage in "bold experimentation" on the American people.

Joe C. of VA 5:39AM January 08, 2009

As long as those entities have money they are willing to loan, U.S. leaders will keep trying to borrow our way out of debt.
It has never worked before, so it is politically logical that if we keep on doing the same thing, surely we can expect a different outcome sooner or later?

HillbillyBill of TN 6:37AM January 07, 2009

Now I am sure if we went back to your 2001-2008 posts we would find snarky pleas for deficit discipline...or maybe not. Or perhaps that Laffer curve thingy was meant to kick in if taxes had just been reduced even more.
But putting that all to the side, you would propose contracting the deficit amidst the recession/depression? If so how, tax increases? spending decreases, if so, on what? thx.

concerned reader of Pethmeth of 12:58PM January 06, 2009

Budget Deficit: Biggest Since World War Two?

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