From the Left

/

Politics

The Debt: Mission Unaccomplished

Ruth Marcus on

WASHINGTON -- Oh, the debt. Yawn. How passe. How 2009.

Once, President Obama held a summit on fiscal responsibility (2009). Once, he gave an entire speech devoted to the subject (2011). Once, his State of the Union addresses (2010, 2011, 2013) were studded with double-digit references to the problem of sky-high deficits and lingering mountains of debt.

Now, the topic receives just glancing mention, a clause ("shrinking deficits") in a series of presidential back-pats, and a refutation of warnings of Apocalypse Soon.

"At every step, we were told our goals were misguided or too ambitious; that we would crush jobs and explode deficits," Obama said in this year's State of the Union address. "Instead, we've seen the fastest economic growth in over a decade, our deficits cut by two-thirds, a stock market that has doubled, and health care inflation at its lowest rate in 50 years."

He didn't say "mission accomplished," but that was the unmistakable point.

Except the mission isn't, as the Congressional Budget Office and its departing (Democratic) director, Douglas Elmendorf, usefully pointed out this week in the CBO's annual report on the nation's finances.

 

Yes, the presidential math is correct: The deficit has shrunk from its jaw-dropping heights ($1.4 trillion in 2009) to a projected $468 billion this year. A pile of money, to be sure, but eminently manageable as a percentage of the economy -- 2.6 percent, about the historical average, compared with 9.8 percent in 2009.

But this column isn't about the deficit -- it's about the debt, the lingering, and potentially dangerous, hangover of years of spending beyond our means, plus the hammer-blow of the financial crisis.

The CBO put the ugly picture of the trajectory of federal debt on the cover of this year's report, and for good reason. At the end of this fiscal year, debt held by the public (the most relevant measure of federal debt) will be 74 percent of gross domestic product.

That is, as the CBO notes, "more than twice what it was at the end of 2007 and higher than in any year since 1950." Scarier still, it's getting worse, not better; beginning in 2018, deficits start to grow again. As a result, "by 2025, in CBO's baseline projections, federal debt rises to nearly 79 percent of GDP."

...continued

swipe to next page

Copyright 2015 Washington Post Writers Group

 

 

Comics

Joel Pett Jeff Danziger Adam Zyglis Bob Gorrell Jeff Koterba Dick Wright