If deficits were temporary — they were certainly justified to temper the recession — or small, they would be less worrisome. That was true for many years. No more. An aging population and uncontrolled health costs now create an ongoing and massive mismatch between spending and revenue, even at “full employment.” The great threat is a future debt crisis, with investors balking at buying all the Treasury bonds the government requires to operate. So President Obama and Congress face a dilemma: The more they seek to defuse the economic problem of too much debt, the greater the political risks they assume by cutting spending or raising taxes.
The package to prevent a shutdown barely touches the prevailing stalemate. House Budget Committee Chairman Paul Ryan’s proposed 2012 budget forthrightly addresses health spending but doesn’t make any cuts in Social Security. Ryan’s plan would ultimately gut defense and some valuable domestic programs; it wouldn’t reach balance until about 2040. Compared with Democrats, however, Ryan is a model of intellectual rigor and political courage. Obama would run huge deficits from now to eternity; the Congressional Budget Office has projected about $12 trillion of added debt from 2010 to 2021 under his policies. Obama urges an “adult” conversation and acts like a child, denying the unappealing choices.