Is the US facing an inevitable national debt and deficit crisis?
The nonpartisan Congressional Budget Office keeps warning that the federal budget is on an unsustainable path, recently projecting that the debt held by the public as a share of nominal gross domestic product could soar from the current 73% to 190% by 2038. And yet, just like that profligate relative, the Obama administration has often claimed credit for bringing down the yearly deficit from unheard-of levels of more than $1 trillion to still-record levels of about half a trillion.
UNDUE CREDIT WAS ALSO bestowed last week on the budget deal officially labeled the Bipartisan Budget Act of 2013.
Even according to the upbeat claims of the House Budget Committee, the deal will reduce the federal deficit over 10 years by just $23 billion, practically a rounding error in an annual deficit projected to rise by 2023 to nearly $0.9 trillion. And even that $23 billion is no more than a gleam in the eyes of our fiscal mandarins.
In the familiar Washington pattern of bait-and-switch, the deal provides for higher spending than originally planned over the next two years -- thus adding still more to deficits and debt -- with savings backloaded to later years. As for whether those savings will actually materialize, or be offset by spending increases down the road, the latter alternative seems the safer bet.''