The Gloomy Science gets even Gloomier Pt.1


The White House released yesterday it first full year budget proposal. The news is so bad, I wonder if it is not an de facto suicide note.

The Budget Proposal projects spending of about $3.8 trillion, while raising $2.2 trillion – a deficit of $1.6 trillion. The “good” news is that the budget is likely fairly honest, and specifically in some areas a vast improvement in what went before. The bad news is the budget document projects huge deficits stretching out pretty much forever, dipping somewhat in the late second decade, before mushrooming again in 2020.  The potentially catastrophic news, if that is possible, is that the American electorate is likely, in the months and years ahead, to respond to this by electing politicians who will only make the situation even more dire.

Before we come to grips with the enormity of the problem, it may be beneficial to take a look at the modern economic history of the United States, to refresh our understanding of how we got into this mess. I’ll deal with that in part II.

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