Commentary Magazine


Digging a Hole

Here are some troubling stats:

The U.S. federal budget deficit rose to a record $956.8 billion in the first six months of the fiscal year after the government stepped up spending to cope with a recession that has depressed tax receipts, the Treasury Department reported Friday.
The deficit is well on its way to the $1.75 trillion — or 12.3% of gross domestic product — that the White House has estimated for the full fiscal year, which ends in September.
The deficit through the first six months is more than three times higher than it was at this time last year. The government has borrowed $1 trillion from the public so far this fiscal year.

The prospect of mushrooming debt is one that should trouble both parties, yet there is no sign that the president or the Democratic-controlled Congress intend to seriously address it. To the contrary, the Democrats have plans to spend more money on healthcare. And there are the supplemental defense measures that will be needed to fund our two wars. In short, the promise of fiscal discipline is perhaps the most glaringly unfulfilled one of the Obama campaign.

It will become increasingly difficult to find buyers for our Treasury debt. The likely reality in which growth rates will slow and debt will simply be unsustainable is one which Democratic observers, the CBO, and even OMB head Peter Orszag have all recognized. But the administration which promised an era of financial responsibility is proving to be the most irresponsible yet.

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