How Do You Fill The Deficit Hole?

Something to keep you tossing and turning this evening or if you read it in the morning spoil your whole day.

From EconomistMom:

How about $14 trillion?  $9 trillion ($9.051 trillion) is the Obama Administration’s 10-year deficit projection based on their own economic forecast and their own estimate of the costs of their policy proposals (as proposed in their FY2010 budget).  $7 trillion ($7.137 trillion) is the Congressional Budget Office’s10-year deficit projection based on their economic forecast and policies already in place in current law.  If you start with CBO’s more pessimistic baseline budget outlook of $7 trillion in deficits (by the way, the equivalent pre-policy baseline estimated by the Administration is $6.259 trillion), then add in the CBO-estimated cost of policies that have a good chance of coming true in the future (but aren’t yet written into law), you can come up with a projection that is perhaps more “plausible” than both the Administration’s (optimistic) $9 trillionand CBO’s (naive baseline-constrained) $7 trillion.  That’s what we at Concord try to do when we come up with our “Concord Plausible Baseline,” which based on today’s CBO report shows that current policy would lead to $14.4 trillion in deficits over the next 10 years.

Here’s a link to our press release, where of course, my big soap box is the need for tax reform, or at least a rethinking of whether extending most of the Bush tax cuts (especially via deficit financing) makes any good economic sense:

I haven’t studied their numbers and as I have said before, ten year projections are barely plausible. Nevertheless, when you get a bunch of divergent prognosticators with differing political axes to grind and they all come in with big numbers then you have to consider the fact that huge deficits are probably embedded. The magnitude is just a matter of economic cat fights.

If you buy into that hypothesis then it’s time to get cracking and figure out how to tackle the problem. If you want federal spending to continue apace then be prepared to put forth the requisite proposals to pay for it — taxes! If you don’t want to go that direction then tell me what you’re going to cut. Don’t whine about reducing spending, be specific. Either way cowboy up and come up with something tangible you’ll put your name behind.

Share

Related Posts

You can leave a response, or trackback from your own site.

Leave a Reply