Deficit talks implode as GOP drop out
GOP Won't Negotiate on Debt
The problem isn't just the politicians. It's us! We threaten to throw them out if our taxes are raised. So let's face it... the American electorate is as short-sighted, as its leaders are cowardly. Seriously, who would throw away a career that it's taken an entire life to build up. The average politician wouldn't do it. And come to think of it, neither would anyone else. Basically, thanks to our borrow borrow, spend spend mentality, to the tune of $14 trillion, we're all screwed.
It's all political ...
Following on a decision by House Majority Leader Rep. Eric Cantor, R-Va., to pull out of the White House-led debt and deficit talks on Thursday, the other Republican negotiator, Sen. Jon Kyl of Arizona, has also dropped out, because they will not negotiate any further until Democrats take tax increases off the table. Their stance reflect an assessment that there are not the votes in the House to pass any deal that includes tax increases.
Senate Budget Chairman Kent Conrad, D-N.D., noted that GOP control of the House means “they have to take some responsibility, too. “Let’s get real, let’s get honest. This is a spending problem and a revenue problem,” Conrad said.
CBO Report - the urgency of the times
In the annual Long-Term Budget Outlook, the legislature’s budget scorekeepers said that the ratio of debt to GDP this year will be 69 percent, 7 percentage points higher than last year. In 2021, the CBO predicts debt will reach 76 percent of GDP, but under a more dire—and more likely—scenario, the public debt will be 101 percent of GDP 10 years from now, well into the economic danger zone of 90 percent or more.
Last year, that worst-case scenario predicted a debt-to-GDP ratio of 87 percent in 2020, demonstrating that the public debt picture has worsened considerably, in part due to a bipartisan tax deal last year that reduced expected revenue.
To keep deficits and debt from climbing to unsustainable levels, policymakers will need to increase revenues substantially as a percentage of GDP, decrease spending significantly from projected levels, or adopt some combination of those two approaches. Making such changes while economic activity and employment remain well below their potential levels would probably slow the economic recovery. However, the sooner that medium- and long-term changes to tax and spending policies are agreed on, and the sooner they are carried out once the economy recovers, the smaller will be the damage to the economy from growing federal debt. Earlier action would permit smaller or more gradual changes and would give people more time to adjust to them, but it would require more sacrifices sooner from current older workers and retirees for the benefit of younger workers and future generations.