By Forrest Jones
The gaping deficits are threatening the economy to the point they can no longer be ignored by anyone in government and may lead “to a crisis that could dwarf 2008," 10 former members of the President’s Council of Economic Advisers write in an open letter published by Politico.
The letter, written by former chairmen and chairwomen of the council serving both Republican and Democratic administrations, say recommendations by budget watchdogs Erskine Bowles and Alan Simpson arguing that the long-run federal budget deficit will pose a serious threat to the economy need much more attention from both political parties. Bowles and Simpson co-chaired the White House’s deficit-reduction commission in 2010.
The nonpartisan Congressional Budget Office in January raised its estimate for the annual deficit from $1.1 trillion to $1.5 trillion. It said the tax cuts would add $400 billion to this year's gap. The budget year ends Sept. 30.
The full-year deficit would exceed 2009's record deficit of $1.41 trillion. And it would mark the third straight year of $1 trillion-plus deficits.
"There are many issues on which we don’t agree. Yet we find ourselves in remarkable unanimity about the long-run federal budget deficit: It is a severe threat that calls for serious and prompt attention," the authors write in the letter addressing Congress and President Barack Obama.
"While the actual deficit is likely to shrink over the next few years as the economy continues to recover, the aging of the baby-boom generation and rapidly rising healthcare costs are likely to create a large and growing gap between spending and revenues. These deficits will take a toll on private investment and economic growth."
Lenders, the authors point out, will run out of patience with Washington's spending spree.
"At some point, bond markets are likely to turn on the United States — leading to a crisis that could dwarf 2008."
Read the entire article.
The letter, written by former chairmen and chairwomen of the council serving both Republican and Democratic administrations, say recommendations by budget watchdogs Erskine Bowles and Alan Simpson arguing that the long-run federal budget deficit will pose a serious threat to the economy need much more attention from both political parties. Bowles and Simpson co-chaired the White House’s deficit-reduction commission in 2010.
The nonpartisan Congressional Budget Office in January raised its estimate for the annual deficit from $1.1 trillion to $1.5 trillion. It said the tax cuts would add $400 billion to this year's gap. The budget year ends Sept. 30.
The full-year deficit would exceed 2009's record deficit of $1.41 trillion. And it would mark the third straight year of $1 trillion-plus deficits.
-(1).jpg.aspx?sitename=Newsmax&) |
| Erskine Bowles (left) and Alan Simpson |
"While the actual deficit is likely to shrink over the next few years as the economy continues to recover, the aging of the baby-boom generation and rapidly rising healthcare costs are likely to create a large and growing gap between spending and revenues. These deficits will take a toll on private investment and economic growth."
Lenders, the authors point out, will run out of patience with Washington's spending spree.
"At some point, bond markets are likely to turn on the United States — leading to a crisis that could dwarf 2008."
Read the entire article.
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