While Washington politicos attempt to
score points with scary talk of "fiscal cliffs" This chart puts the current and projected public debt as a percentage of GDP in perspective. As most informed economists admit, the United States does not have a current deficit problem. It does have a serious recession problem that could be made worse by unnecessary austerity measures. The two projected paths are the CBO's two scenarios: one with higher taxes (expiration of the Bush tax cuts for the rich) and lower spending; the alternative scenario with lower taxes and higher spending. In other words, if El Obamados and Congress do nothing and allow the tax cuts to expire and allow the automatic spending cuts to occur in 2013--something which Washington is extremely practiced at doing-- the debt's baseline scenario with its downward trajectory would be the case.
At least the Democrats have enough sense to prevent a
stealth attack on the golden calf of American politics, Social Security, under the cloak of fiscal restraint.
