Reading the federal deficit

“We’ve never fretted over budget deficits,” said The Wall Street Journal in an editorial, at least not if they finance tax cuts or “spending to win a war,” but the $9 trillion, 10-year federal deficit forecast by the White House budget office is different. Not only is it driven by domestic spending, it’s also based on “laughably implausible” assumptions, like that Congress will hold spending to the rate of inflation. As things are going now, $9 trillion “may be optimistic.”

“Can we please relax?” said Robert Reich in Salon. Ten-year budget projections are “notoriously irrelevant” and wildly inaccurate. Besides, out of context, “deficits and debts mean just about nothing.” In 1945, federal debt was 120 percent of GDP, but economic growth “tamed” that ratio in a few short years. The only number “worth looking at” is the deficit projection for next year—$1.6 trillion—which, given our bad jobless numbers, seems “alarmingly small.”

Small? America’s fiscal situation is an unsustainable, “dreadful mess,” said James Pethokoukis in Reuters. Not that Americans are much help—we need to choose between higher taxes or smaller government, but “a fair reading of the polls” shows we “sort of want both” lower taxes and more government services. And our “politicians are certainly no better.”

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Well, they need to step up, said The Washington Post in an editorial. The Obama White House “has a point” that more than half of the $9 trillion deficit stems from Bush-era tax cuts, wars, and other policies, but it’s “time to stop crying ‘we inherited it.’” Obama needs his own “clear, credible plan” to restore fiscal sustainability.