Stephanie
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SNIP:
By DAVID BROOKS
Published: December 31, 2012 583 Comments
Read All Comments (583) »
Public debt as a percentage of gross domestic product was around 38 percent in 1965. It is around 74 percent now. Debt could approach a ruinous 90 percent of G.D.P. in a decade and a cataclysmic 247 percent of G.D.P. 30 years from now, according to the Congressional Budget Office and JPMorgan.
By 2025, entitlement spending and debt payments are projected to suck up all federal revenue. Obligations to the elderly are already squeezing programs for the young and the needy. Those obligations will lead to gigantic living standard declines for future generations. According to the International Monetary Fund, meeting America’s long-term obligations will require an immediate and permanent 35 percent increase in all taxes and a 35 percent cut in all benefits.
So except for a few rabid debt-deniers, almost everybody agrees we have to do something fundamental to preserve these programs. The problem is that politicians have never found a politically possible way to begin. Every time they tried to reduce debt, they ended up borrowing more and making everything worse.
So Congress and President Obama set up the “fiscal cliff,” an artificial disaster scenario that would force them to do the right thing. Obviously, the fiscal cliff negotiations were not going to lead toward the deep structural reforms that will eventually be needed. But they could have begun the reform process.
all of it here with comments
http://www.nytimes.com/2013/01/01/opinion/brooks-another-fiscal-flop.html?ref=davidbrooks&_r=0
SNIP:
By DAVID BROOKS
Published: December 31, 2012 583 Comments
Read All Comments (583) »
Public debt as a percentage of gross domestic product was around 38 percent in 1965. It is around 74 percent now. Debt could approach a ruinous 90 percent of G.D.P. in a decade and a cataclysmic 247 percent of G.D.P. 30 years from now, according to the Congressional Budget Office and JPMorgan.
By 2025, entitlement spending and debt payments are projected to suck up all federal revenue. Obligations to the elderly are already squeezing programs for the young and the needy. Those obligations will lead to gigantic living standard declines for future generations. According to the International Monetary Fund, meeting America’s long-term obligations will require an immediate and permanent 35 percent increase in all taxes and a 35 percent cut in all benefits.
So except for a few rabid debt-deniers, almost everybody agrees we have to do something fundamental to preserve these programs. The problem is that politicians have never found a politically possible way to begin. Every time they tried to reduce debt, they ended up borrowing more and making everything worse.
So Congress and President Obama set up the “fiscal cliff,” an artificial disaster scenario that would force them to do the right thing. Obviously, the fiscal cliff negotiations were not going to lead toward the deep structural reforms that will eventually be needed. But they could have begun the reform process.
all of it here with comments
http://www.nytimes.com/2013/01/01/opinion/brooks-another-fiscal-flop.html?ref=davidbrooks&_r=0
