Thursday, June 11, 2009

Current Deficits

David Leonhardt published a great article on U.S. deficits in yesterday's N.Y. Times. Here's a pie chart breaking down the sources of the current deficit (thank Yglesias).

The first two paragraphs provide a nice summary of the article’s conclusions:

There are two basic truths about the enormous deficits that the federal government will run in the coming years.

The first is that President Obama’s agenda, ambitious as it may be, is responsible for only a sliver of the deficits, despite what many of his Republican critics are saying. The second is that Mr. Obama does not have a realistic plan for eliminating the deficit, despite what his advisers have suggested.

Of course, the reason Obama's agenda increases the deficit by only a "sliver" is that he plans to raise taxes while increasing government spending. As economist Alan Auerbach notes in the article,

Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he’s not fixing it. And . . . not fixing it is, in a sense, making it worse.

Although Obama's not the sole (or even main) cause of the deficit, Americans should hold him accountable if he fails to improve the situation.

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