• What happened between 2001 and 2011?

    Great fact sheet from Pew Charitable Trust on how we went from a projected surplus in 2001 to our current projected debt situation. A very nice figure summarizes:

    About two-thirds of the change was due to policy choices made in the past decade. If we are going to ever have a balanced budget, it will take a mix of tax increases and spending reductions over the status quo as it exists today. In other words, policy choices. There are multiple approaches, and all sorts of plans.  Addressing health care costs is a necessary, but not a sufficient condition to ever having a balanced budget. The next step is a political compromise that lets us move ahead.

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    • Addressing health care costs is a necessary, but not a sufficient condition to ever having a balanced budget

      Last time I looked at this, bringing healthcare costs in line with world standards (that is, cutting them in half if not more), would be enough. That and moving the economy back to its trend growth path and ending a few wars.

      In the chart, a fair part of the spending increase is counter-cyclical spending and the like.

      • @foosion
        Yes. But that is like saying cold fusion would rid us of energy problems! True, but not so clear how to do it….
        Don

        • @Don, much of the current narrative is that we have a spending problem due to general government spending. The better answer is that we have a healthcare problem.

          That it’s “not so clear how to do it” is a different matter than figuring out what the problem is. Fixing healthcare will require reducing the income of some very rich and powerful interests, which may well mean that it’s practically impossible.

          I believe that policy choices made over the past decade are responsible for more than 2/3 of the problem. Tax cuts, wars, part D, plus the regulatory choices (including de-regulatory choices) that led to the housing bubble/credit crisis, crash, results and response, total very big numbers.