Analysts say future budget outlook gloomy

[rumguy]

" Keeping the federal budget at or near balance over the next 50 years could require painful tax increases, spending cuts or both, the Congressional Budget Office says.

In a look at the government's long-term budget outlook, Congress' nonpartisan fiscal analyst offered possible combinations of tax and spending changes, all of which would leave lawmakers choosing among politically unpalatable options.

Even so, some still would leave the government in fiscal peril. Yet, failing to act would drive the accumulated federal debt to unsustainable levels, said the study, released Friday.

"Taken to the extreme, such a path could result in an economic crisis," including the possibilities that foreign investors would pull out, the dollar's value plunge, interest rates and prices soar and stock markets collapse."

http://www.salon.com/news/wire/2003/12/20/budget/index.html

I guess this is what happens when our government gets hijacked by a bunch of greedy repugs...what irresponsible gluttons!!!

[pscot]

1. In a democracy, Ya get what ya deserve

Most of the electorate are economically illiterate. They want it all and they don't want to pay taxes. If the publics' I.Q. equalled its body temperature they might see that Bush's economic policies are leading us down the road to ruin. This all is starting to have an aire of inevitability about it. We're like lemmings. We know we're going to run off a cliff, but we just can't help ourselves.

[chessman]

4. Uneducated Electorate

The spending of this administration is staggering. The term conservative does not apply to them at all. I predict that the dem candidate that seizes the issue of the budget deficit and the wild spending of the Bush administration will win the nomination and actually have a chance to win the general election.

With a consumer confidence based economy we are one serious terrorist attack away from major economic decline. That will prove to be our achilles heal and this is not being addressed by our leaders.

[kalian]

2. REAL economists have been worrying about this for quite some time....

Yes, the dollar is going to plunge.
Yes, intrest rates will begin to sky rocket shortly there after.
Yes, the housing market will collapse.
Yes, the stock market will plunge.
Yes, gold's and silver's prices will rise.

Bottomline: its just a matter of time...

[gristy]

3. So that's the sequence?

foreign investors would pull out, the dollar's value plunge, interest rates and prices soar and stock markets collapse.

I'd written Krugman several times to lay it out in his column. Don't know that he's done it yet. Haven't read him in the past month, though.

Once the process gets underway (I suppose you could say it's happening already, re. the dollar), are we talking days, weeks, months, or years???

[kalian]

7. Months really....

unless a "shock effect" of some sort wrecks the markets beforehand.
I believe that energy prices will sky rocket eventually and this
might be what is needed to tip things into the abyss.

Just remember: be careful what you wish for...
Yes, it might "bring down" Bush...but we're going to have to live
with the consequences...

[The Zanti Regent]

9. But the Nazis don't care because JESUS IS COMING

They don't care how much they piss on the economy because they believe the Rapure shit that Jesus will come for them in a week or two!

[wryter2000]

5. It was intentional

They wanted to make things so bad we'd have to ditch Social Security and Medicare.

[ConcernedCanuk]

6. BUT - y'all got one big feckin' WarMachine !! Who could want more ??

[Philosophy]

8. Must be fuzzy math

http://bushspeaks.com/home.asp?did=123

[teryang]

10. listening to CNBC talking heads

...who do have backgrounds in business and economics, we hear that deficits don't matter and are overrated by democratic officials as a problem. According to these spinners, as a percentage of GDP they are "no larger" than previous deficits and Reagan "proved" they are good for the economcy!

Of course they are those that say the government deficit numbers are "sexed up" and the deficit is a lot worse than advertised. It is closer to a trillion a year than 500 billion.

I find the GDP argument intriguing and false because there really is no reason for government budget deficits to expand with the GDP. To introduce this as a fiduciary standard is completely arbitrary and misleading. It is interesting that the Pentagon budget is higher than that at the peak of the Vietnam war, yet far fewer soldiers are actually deployed and the absolute number of active duty forces is much lower. What is wrong with that picture? Of course dumping billions of dollars a month overseas on a war and an overextended military doesn't stimulate the economy here as much as intentional deficit spending at home would.