In response to Geithner’s recent proclaimations about the deficit
Posted by: johnlimberakis // Category: Blog Entries, General, Guest Contributors, John LimberakisYou should all take some time to read this article.
http://news.yahoo.com/s/nm/20091017/us_nm/us_washington_summit_economy_geithner
The basic premise, inter alia, is that future deficits are too high and the government has to, “live within its means” after the recession. A couple of things to ask here initially:
1) If future deficits are too high then why is the administration pushing for increased domestic programs like health care, stimulus, and green energy projects?
2) If future deficits are too high and the administration is focused on raising domestic spending then how can they accomplish cutting the deficit without excessive taxation?
Before conservatives brandish their torches, pitchforks, and, now officially constitutionally protected, firearms they should acknowledge that Geithner is right; the government does need to live within its means after the recession. But how the government gets there is where conservatives and liberals disagree. Deficits are going to rise because of three

or four entitlement programs (the fourth would be the healthcare bill floating around in the senate), the interest on the national debt, and the increasing, read bloated, baseline that is discretionary domestic spending. This graph by Centrists.org provides a conservative estimate of the increased burden of the three largest mandatory entitlement programs such as social security, Medicare, Medicaid, and the interest paid on the increasing national debt. It is conservative because these programs could cost much more. In fact the CBO has estimated that social security, Medicare, and Medicaid alone could total 20% or higher of US GDP by the 2030’s (higher estimates, provided by the CBO, hover around 28% of US GDP). Add the defense budget, the interest on the national debt, every other federal government program, and then all the state and municipal government expenditures to the mandatory triumvirate and all of a sudden the US is France (Government 50% or higher as % of GDP) – Oh mon dieu!
Clearly Geithner’s rhetoric is out of kilter with the current and future situation unless 1) Geithner and the administration plan to cut net government spending (the evidence is clear that they do not), and/or 2) Geithner and the administration plan to raise taxes substantially (the evidence is clear that they do), and/or 3) Geithner and the administration conceive that tax revenues will naturally rise and spending will naturally fall or plateau. There is some evidence of 3, but even in a best case scenario that evidence would still result in a much larger government and immense yearly deficits.





