The American fiscal disaster continues:
The U.S. budget deficit will balloon to $2.29 trillion over the next decade, a worse outlook than previously forecast according to a new report by congressional analysts, said a congressional source Tuesday.
The forecast from the non-partisan Congressional Budget Office, which is likely to stir the election-year debate about President Bush’s economic policies, is more than the $2.01 trillion outlook for 2005-2014 it gave in March for the deficit that will be created under current economic policies.
I thought the following fact was particularly funny, considering the enormous failure of the White House to provide a conservative, responsible fiscal policy:
The White House no longer provides a 10-year deficit forecast.
Of course you don’t… why on Earth would you want to voluntarily call attention to how you cast our nation into debt for generations? The dot-com boom isn’t ever coming back you know…
Many conservative pundits will tell you that deficits don’t matter. Of course they don’t matter to an irresponsible administration that doesn’t care about saddling our country with a crippling debt. Of course they don’t matter to the pundits that want you to forget about the consequences of debt and just get out the vote for the Republican Bobblehead. Of course lower- and middle-class citizens don’t care because it’s not one of those subjects where people can directly equate ballooning deficits to money flying out of their pockets. Tax cuts? Yeah – four hundred dollars, I get that! Two trillion dollar deficit? Uh… um… Well as long as Dubyah gives me my four hunnert dallers, ‘den I trust my boy will do his best to bring down that there def-i-sit ‘cuz ‘dats his job. Let’s face it: tax cuts don’t require much explaining to the recipient. The take their little check and drop it in the bank. But with a gargantuan deficit, it takes a complex discussion to explain what is being lost to the individual. Your government is spending more money than it has. And the first rule of economics is: There is no free lunch. Eventually, that money has to be paid back. That somebody is you in your retirement, your children, your children’s children.
Large sustained deficits lead to higher interest rates, drops in household income, and of course – higher taxes and government fees to make up the difference. That tax cut rebate you get in that little envelope from the IRS is like a temporary loan the government is giving you, and you will pay it back later in the form of either recouping deficit shortfall, or a loss of government services and the evaporation of things you’ve been paying for all your life like Social Security and Medicare. A budget deficit is not just irresponsible government. Deficits are robbery. Politicians, the rich, and the banks will profit. You will lose.