Some try to duck the budget issue by saying that we shouldn't tighten our belts when the economy is so weak. This is true in a limited sense: We do not want major tax increases or spending reductions in 2010 or 2011. But we can — and must — hurry to put our nation on a more sustainable path, so that desperately needed policy reforms can take effect as soon as economic conditions allow. A move to shore up our finances might even help to improve those conditions. World financial markets would certainly welcome signs that the United States recognizes its budgetary challenges and is willing to take hard steps to address them. And families and businesses would appreciate the advance warning about future changes in their taxes and benefits.
Wednesday, March 31, 2010
this article in the National Affairs (HT Mankiw). If there are problems of sustainability in our economy, then this is the mother of them all. Here's a summary: