Fiscal Follies in America and Beyond

Those of us who know that long-run fiscal imbalances are likely to end in disaster – high inflation, deep recession, financial crisis, or all three – scratch our heads in bemusement at the priorities of George W. Bush and his administration. The Social Security “crisis” that he wants to spend his political capital on “resolving” ranks no higher than third among America’s fiscal problems in urgency and seriousness – and at a time when these problems have grown into a profound threat to global economic stability.

America’s gravest fiscal problem is the short- and medium-run deficit between tax revenues and spending. This deficit is entirely of Bush’s own creation, having enacted – and now seeking to extend – tax cuts that are not cuts at all, because they merely shift the burden of fiscal consolidation onto future generations.

The second most serious problem is the looming long-term explosion in the costs of America’s health care programs. This is also partly Bush’s doing, or, rather, not doing, as his first-term policy on health spending was to do virtually nothing to encourage efficiency and cost containment. Instead, he enacted a Medicare drug benefit that promises to spend enormous amounts of money for surprisingly little in the way of better health care.

To continue reading, please log in or enter your email address.

To access our archive, please log in or register now and read two articles from our archive every month for free. For unlimited access to our archive, as well as to the unrivaled analysis of PS On Point, subscribe now.

required

By proceeding, you agree to our Terms of Service and Privacy Policy, which describes the personal data we collect and how we use it.

Log in

http://prosyn.org/wZADFKL;

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.