Thursday, April 29, 2010

Laying the Path to Fiscal Responsibility - Really?

Here's a paragraph from a White House OMB announcement by Orszag regarding the National Commission on Fiscal Responsibility and Reform, which came out yesterday:
Recognizing the fiscal future that we face, the Administration has taken major steps to restore fiscal responsibility. The President’s Budget includes more deficit reduction than proposed by a President in any budget in over a decade; by 2015, it would cut the deficit from 5 percent of GDP to 4 percent of GDP.
Should I be impressed? It will only take eight years for the federal debt held by the public to balloon to 100% of the GDP with a 4% deficit!

From 1947 to 2008, the US federal deficit was higher than 4% (and not by much) only in 7 years: 1976, 1983, 1984, 1985, 1986, 1991 and 1992. It was equal to 9.91% in 2009 and is projected to be equal to 10.64% in 2010.

Anyone knows of a trusty rocketship leaving to a colony in Mars?

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