The real problem is not the current deficits that the president has projected. These deficits are to a large extent inescapable because of the financial emergency we find ourselves in, the rescue of the financial system, the stimulus package to jump-start the American economy. But it's worth understanding why this gets us to 10 percent of GDP, the worst deficit since World War II.
And it is because, as the president points out, the budget was broken in the first place. It was broken by three decisions made during the Bush administration.
The first was to have massive tax cuts, which was a decision made in the wake of the Clinton surpluses.
The second decision was to have a massive new entitlement program -- prescription drugs for the elderly -- which took the fastest growing part of the American population and joined it to the fastest-rising costs in American health care, which is prescription drugs. It was therefore a marriage made in budgetary hell.
And the third, of course, was to have two wars that were going to be funded without any tax increases, the first time in modern American history that that decision was made. ... A partial exception was Vietnam, which produced an economic catastrophe in the 1970s.
And then you add to it the fact that we were in a financial and economic crisis and needed to spend money to get out of it, and you have the current budget problem.
Budget fixes are simple -- and unthinkable - CNN.com
And it is because, as the president points out, the budget was broken in the first place. It was broken by three decisions made during the Bush administration.
The first was to have massive tax cuts, which was a decision made in the wake of the Clinton surpluses.
The second decision was to have a massive new entitlement program -- prescription drugs for the elderly -- which took the fastest growing part of the American population and joined it to the fastest-rising costs in American health care, which is prescription drugs. It was therefore a marriage made in budgetary hell.
And the third, of course, was to have two wars that were going to be funded without any tax increases, the first time in modern American history that that decision was made. ... A partial exception was Vietnam, which produced an economic catastrophe in the 1970s.
And then you add to it the fact that we were in a financial and economic crisis and needed to spend money to get out of it, and you have the current budget problem.
Budget fixes are simple -- and unthinkable - CNN.com
