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Ten years ago? Seriously?
I agree with the President that he inherited a tough situation, although I disagree with his explanation of the causes. Our fiscal car is driving toward a cliff. To avoid the cliff, the President might want to turn the wheel left, and I might want to turn right. At the same time, President Obama has the wheel. Complaining about the previous driver won't prevent us from driving off the cliff. I hope the President will soon stop focusing on the last decade, and instead propose solutions for the next one.
What is the goal of the President’s Fiscal Commission?
While the President and his team are using the phrase "balanced budget" in their short-term goal for the Fiscal Commission, the actual goal is to reduce the budget deficit to no more than 3.0% by 2015. That is a very weak fiscal policy goal, resulting only in stabilizing debt as a percentage of the economy.
Which is the decade of profligacy?
President Obama: "Our government is deeply in debt after what can only be described as a decade of profligacy." Hennessey: "Which decade?"
The President’s bigger budget
The President proposed his budget today. I will focus on the size of the proposed budget relative to the rest of the economy. The deficit is an important but incomplete measure of this. It's important to remember that every dollar not spent by the government is a dollar that can be spent by individuals, families, and firms. We should care not just about the difference between spending and taxes, but also on how big government is relative to the private sector.