catoismymotor (72.99)

Cato Institute: Deaf to Deficit Warnings

January 31, 2010 – Comments (2)

Deaf to Deficit Warnings

by Richard W. Rahn

Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.

Added to cato.org on January 20, 2010

This article appeared in the Washington Times on January 20, 2010.

Politicos ignore overspending consequences at their peril

"So what?" is the implicit expression of much of the

Washington political class when it comes to spending and taxing. The

consequences of Washington's fiscal irresponsibility are not evident to

many in the media and electorate — yet. But the pain will come — and it

will hit almost every American. Last week, I explained how government

deficits are strangling necessary capital formation. The following

describes the impact on job creation and growth, and next week, I will

present a way out of the mess.

On Jan. 26, the Congressional Budget Office will release its new

estimate of future government spending, tax revenues and the budget

deficit. It is a safe bet that the forecasts for the deficit and future

size of government will show a very big jump from CBO's previous

forecast in August. Private forecasters already are estimating that the

ratio of government debt to gross domestic product (GDP) will be

greater than 100 percent of GDP before the end of this decade (up from

just 37 percent three years ago). If the health care reform bill and

the energy (cap-and-trade) bill are passed, the situation will be much

worse...

LINK TO THE ARTICLE