Friday, February 09, 2018

The G.O.P. Is Flirting With Fiscal Disaster

In August 2015, the leading Washington budget watchdog predicted that the federal deficit would total about $600 billion the next year.

Now, just about two and a half years later, the projected gap for 2019 has grown to $1.2 trillion, in large part because of a boisterous round of tax cuts and spending increases. And if history is any guide, when the books close, the final number will be higher.

That amounts to a shortfall that will rival the deficits of a decade ago, when the economy was struggling to recover from the financial crisis and ensuing recession.

But while fiscal stimulus to restore economic growth has merit, staggering deficits in the ninth year of a recovery, with unemployment down to 4.1 percent, make no sense.

In addition to piling more debt onto the current $20 trillion of outstanding obligations, today’s mounting gap between revenues and expenses is already contributing to higher interest rates and the shakiness in the stock market.

Leading the charge into rising amounts of red ink have been the Trump administration and Republicans in Congress.

Yes, blame for what is likely to be $15 trillion of added debt over the next 10 years should be placed squarely on the self-proclaimed party of fiscal responsibility.

“The level of national debt is dangerous and unacceptable,” the Senate majority leader, Mitch McConnell, said in 2016. Referring to President Obama’s stimulus program, he added, “We borrowed $1 trillion and nobody could find that it did much of anything.”

That was then and this is now.

Read the rest here.

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