Wednesday, June 29, 2011

The Impending Doom of Debt

The Wall Street Journal: Lawrence B. Lindsey: The Deficit Is Worse Than We Think:

...the president's budget of February 2011 projects economic growth of 4% in 2012, 4.5% in 2013, and 4.2% in 2014. That budget also estimates that the 10-year budget cost of missing the growth estimate by just one point for one year is $750 billion. So, if we just grow at trend those three years, we will miss the president's forecast by a cumulative 5.2 percentage points and—using the numbers provided in his budget—incur additional debt of $4 trillion. That is the equivalent of all of the 10-year savings in Congressman Paul Ryan's budget, passed by the House in April, or in the Bowles-Simpson budget plan.

The only real option is to cut spending, but since the only programs large enough to make a difference are Social Security, Medicare/Medicaid, and Defense, it's politically impossible to make those cuts.

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