The deficit: Can the U.S. ever dig itself out?
President Obama’s 2011 budget would leave us with a deficit of $1.3 trillion—and projects massive deficits for a decade.
Could the United States of America become a deadbeat nation? asked Investors Business Daily in an editorial. To question whether the most powerful country on earth could wind up defaulting on its debt “would have seemed absurd just a few years ago.” But that was before Washington’s “extraordinary surge of debt-related spending” left some economists fretting about America’s very solvency. President Obama’s 2011 budget would leave us with a deficit of $1.3 trillion—and projects massive deficits for a decade. Congress is lifting the debt ceiling—the amount of cumulative debt the Treasury can carry—to $14.3 trillion, “roughly the size of the entire economy.” At this rate, by 2020 we’ll be spending more on interest on that debt than on anything besides entitlements. Obama keeps saying he inherited this mess, said National Review. Fair enough. But he’s taking that “swelling juggernaut and supersizing it.”
Bigger deficits are an inevitability during a downturn, said R. Glenn Hubbard in The Wall Street Journal, because tax receipts plummet. But with Medicare and Social Security costs about to explode to support retiring baby boomers, the nation’s economic health is now truly in jeopardy. Every dollar the government spends servicing the debt is not spent productively—on roads, or bridges, or education. Even if policymakers wanted to tax their way out of this hole, the tax hikes needed to dent the deficit monster would have to be so large that they’d stifle economic growth. So let’s face it: “The problem is spending.”
Don’t buy into this deficit hysteria, said Paul Krugman in The New York Times. “Many economists take a much calmer view of budget deficits” than the fearmongers on the Right, who have a simple, politically motivated goal: to stifle Obama’s ambitious agenda, from health-care reform to jobs-creating stimulus spending. “The hypocrisy is breathtaking”—these same “apostles of fiscal rectitude” voted for George W. Bush’s “budget-busting tax cuts,” Medicare expansion, and trillion-dollar foreign wars. The truth is that “running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do,” because without more federal dollars coursing through a depressed economy, we might never recover. But in the long term, said The New York Times in an editorial, the U.S. can’t keep the red ink flowing at this rate. Creditors such as China could lose confidence in our government’s ability to pay back the debt and “decide to put their money elsewhere.”
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
![https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516-320-80.jpg)
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
It’s time for both Republicans and Democrats to level with the American people, said Robert Samuelson in The Washington Post. Nearly half of all spending involves just three programs: Social Security, Medicare, and Medicaid. Either we raise everyone’s taxes 50 percent to cover the shortfall, or we raise the retirement age to 70 and reduce benefits for wealthier retirees. Farm subsidies, high-tech weaponry, and other unnecessary programs aimed at “favored constituencies” will have to be completely eliminated. “We can no longer just tinker.” But can Americans handle the truth? asked Jacob Weisberg in Slate.com. Polls show that people want it “both ways”: We want balanced budgets and lower taxes; we dislike “big government,” unless it’s providing a service we want. Because of our immaturity, the U.S. faces an era of historic decline. “To change this story line, we need to stop blaming the rascals we elect to office, and look instead to ourselves.”
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Create an account with the same email registered to your subscription to unlock access.
-
Nasa's 'strangest find': pure sulphur on Mars
Under the Radar Curiosity rover discovers elemental sulphur rocks, adding to 'growing evidence' of life-sustaining elements on Red Planet
By Harriet Marsden, The Week UK Published
-
Bodycam shows deputy killing Black woman
Speed Read An Illinois deputy fatally shot Sonya Massey, who had called 911 about suspected trespassers
By Peter Weber, The Week US Published
-
'Spare us the charade'
Instant Opinion Opinion, comment and editorials of the day
By Anya Jaremko-Greenwold, The Week US Published
-
How could J.D. Vance impact the special relationship?
Today's Big Question Trump's hawkish pick for VP said UK is the first 'truly Islamist country' with a nuclear weapon
By Harriet Marsden, The Week UK Published
-
Biden, Trump urge calm after assassination attempt
Speed Reads A 20-year-old gunman grazed Trump's ear and fatally shot a rally attendee on Saturday
By Peter Weber, The Week US Published
-
Supreme Court rejects challenge to CFPB
Speed Read The court rejected a conservative-backed challenge to the way the Consumer Financial Protection Bureau is funded
By Peter Weber, The Week US Published
-
Arizona court reinstates 1864 abortion ban
Speed Read The law makes all abortions illegal in the state except to save the mother's life
By Rafi Schwartz, The Week US Published
-
Trump, billions richer, is selling Bibles
Speed Read The former president is hawking a $60 "God Bless the USA Bible"
By Peter Weber, The Week US Published
-
The debate about Biden's age and mental fitness
In Depth Some critics argue Biden is too old to run again. Does the argument have merit?
By Grayson Quay Published
-
How would a second Trump presidency affect Britain?
Today's Big Question Re-election of Republican frontrunner could threaten UK security, warns former head of secret service
By Harriet Marsden, The Week UK Published
-
'Rwanda plan is less a deterrent and more a bluff'
Instant Opinion Opinion, comment and editorials of the day
By The Week UK Published