This is a great article if you want to understand where our current deficit comes from. The article strikes down many common misconceptions about the deficit and supports it all with well-presented data.
- The national deficit puts the U.S. economy in an extremely precarious position because we are dependent on foreign lenders to pay for it.
- The Obama administration maintains that health care reform is the key to eliminating the deficit. However, the administration is not promoting the kind of reforms that would most effectively decrease the debt.
- Health care reform alone will not eliminate the national debt. No matter what solution is ultimately reached, it will have to include spending cuts and tax increases.
Facts & Figures
- 2001 estimates for the years 2009-2012 was an $800 billion surplus per year. Today, the estimate is an annual deficit of $1.2 trillion.
- The debt comes from four main sources: 37% from the business cycle, 33% as a result of the policies of George W. Bush, 20% from President Obama’s continuation of several of those policies, and 10% from new policies of Obama’s.
- Obama’s goal is to achieve a deficit equal to no more than 3% of the GDP in the next five to 10 years, but current estimates are at least a 4% deficit.
Best Quote
“Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he’s not fixing it. And not fixing it is, in a sense, making it worse.” – Alan Auerbach, Economist at the University of California, Berkeley
Tags: economy, national debt, recession