Miscalculating future deficit fighting

14 Aug

From the NYT:

TWO years ago, Adm. Mike Mullen, at the time the chairman of the Joint Chiefs of Staff, said that debt was the “single biggest threat to our national security” — not some rogue nation, or terrorist group, but debt. What makes the threat of exploding debt especially dangerous is that it’s not like a faucet that can be easily turned down. Federal, state and city governments in the United States have lost their fiscal grip, and the saga of Detroit’s bankruptcy is just one example.

Astonishingly, when the Congressional Budget Office recently lowered its forecast of future deficits, many voices on the left claimed that the problem had been overblown by “austerity scaremongers” (that’s us). Even more astonishingly, some voices on the right have renewed calls to “starve the beast” now that deficits are supposedly under control.

Both responses are wrong, but for different reasons.

Read the rest

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