Cruise-control spending


Here's Robert Samuelson on the real threats to the economy:

We cannot have a useful debate on the role of government - what it should do, for whom and at whose expense - if Americans are highly misinformed. Obama should have dispelled some common budgetary myths. Consider three:

Myth: The problem is the deficit. The real issue isn't the deficit. It's the exploding spending on the elderly - for Social Security, Medicare and Medicaid - which automatically expands the size of government. If we ended deficits with tax increases, we would simply exchange one problem (high deficits) for another (high taxes). Either would weaken the economy, and sharply higher taxes would represent an undesirable transfer to retirees from younger taxpayers.

President Obama's call to freeze discretionary spending for five-years is a laughable feint that freezes record spending levels on a tiny sliver of the overall budget. And while Obama has been promoting his "scalpel" approach to budget cutting versus the Republicans "chainsaw," even the whole toolshed will be inadequate:

The latest Obama plan would cut projected outlays by an estimated $400 billion in the next decade, and the Republican alternative would cut spending by $2.5 trillion. It's a measure of our predicament that these enormous sums wouldn't make a lot of difference, even if they were achieved. They're the equivalent of trying to empty a swimming pool with a tablespoon.

Clearly the problem is that the Federal government – over multiple Administrations – has over-promised what it can deliver. We are now running an annual deficit equal to the entire federal budget in the first year of the Clinton Administration and this was before – whoops! – we found out that Social Security is broke.

Oh, never mind. "The Office" is coming on. We're going to monetize the debt.