Can You Balance the Budget?

The US government is projected to be $418 billion dollars in the red by 2015. This number seems daunting (and indeed economists suggest a sustainable level for a budget deficit would be something closer to $18 billion, a number small enough that a year's growth can close the previous year's deficit). Yet, that deficit level -- about 2% of GDP -- isn't on the magnitude of the budget crises that have hobbled other rich countries like Greece and Ireland or even as large as America's budget deficits in the early 1990s.

Looking fifteen years further in the future, the deficit poses a large problem. Rising health-care costs and retiring baby boomers will blow a hole in the 2030 budget equal to $1.345 trillion or 5.5% of GDP: a number substantially higher than either the military budget or the entire domestic discretionary budget (that is everything but social security and medicare) of the country. Without deep spending cuts and substantial tax increases, the long-term problem is intractable.

With that daunting task the New York Times lays out many of the most discussed options for tax hikes and spending cuts and asks you to chose which taxes to increase and which programs to slash to get the government's fiscal house in order.

You have one substantial advantage that members of Congress don't though; you can make sound but politically untenable decisions and don't have to worry that voters will reject them.
SSDAN Office

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