from my blog, Basie!
While the Senate passed a $295 billion transportation bill, a bipartisan group warned that the rapidly increasing deficit could lead America to real disaster. The Washington Post's Dana Milbank has the story.
Stuart Butler, head of domestic policy at the conservative Heritage Foundation, and Isabel Sawhill, director of the left-leaning Brookings Institution's economic studies program, sat down with Comptroller General David M. Walker to bemoan what they jointly called the budget "nightmare."
much more after the jump...
There were no cameras, not a single microphone, and no evidence of a lawmaker or Bush administration official in the room -- just some hungry congressional staffers and boxes of sandwiches from Corner Bakery. But what the three spoke about will have greater consequences than the current fuss over filibusters and Tom DeLay's travel.
With startling unanimity, they agreed that without some combination of big tax increases and major cuts in Medicare, Social Security and most other spending, the country will fall victim to the huge debt and soaring interest rates that collapsed Argentina's economy and caused riots in its streets a few years ago.
"The only thing the United States is able to do a little after 2040 is pay interest on massive and growing federal debt," Walker said. "The model blows up in the mid-2040s. What does that mean? Argentina."
"All true," Sawhill, a budget official in the Clinton administration, concurred.
It's time for officials in Washington to start getting serious about the budgetary problems that afflict the country. As impressive as it is to send staffers to a talk like this, it's not enough.
While the President and his Republican allies in Congress work endlessly to try to privatize Social Security -- a futile effort -- Medicare will be entirely bankrupt within a few decades. What's more, with every attempt by Republicans to get rid of taxes on the extremely wealthy -- the estate tax, capital gains taxes, etc. -- America will have to come up with billions more down the line.
Last week, California Treasurer/gubernatorial candidate Phil Angelides spoke to me about "the Democratic ideal of investing in the next generation, not piling debt upon them." This gets to the heart of the differences between the Democratic Party and the GOP.
Democrats are serious about the economy and have made it their job over the past 75 years to ensure stable and continuous growth for all Americans. FDR bailed out an economy riddled by 12 years of Republican mismanagement. His policies, coupled with those of LBJ, ensured that poverty would no longer hamper America's elderly. Jimmy Carter appointed Paul Volcker to chair the Federal Reserve, a move that eventually ended the stagflation that had occurred as a result of eight years of failed Republican policies. After three terms of Reagan/Bush deficts led to recession and massive job losses, Bill Clinton balanced the budget and helped lead the country into great prosperity.
Republicans, on the other hand, are not serious about the economy. And there have been dire consequences for their gross mismanagement. The Great Depression. The recession of the late 1950s. The stagflation of the 1970s. The 1992 recession. The failure to rebuild the economy following the 2001 recession.
The fact is it's time to work in earnest to bring down the deficit. The only way to achieve this is to turn to the Democrats. If this doesn't occur soon, deficit might not be the only problem. As Heritage's Butler notes, we could be in for an Argentina-like meltdown.
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