June 11, 2009

MEGAN MCARDLE ON THE DEFICIT BLAME GAME:

How is a $118 billion structural deficit, $35 billion in Medicare Part D, and a theoretical end to the Iraq presence forcing Barack Obama to spend nearly $1 trillion in 2018? How is it forcing him to spend roughly $650 trillion more than he takes in in 2012?

This is not Bush’s fault. And you know what? Even if it were Bush’s fault, who cares? It’s like those people in their thirties who spend the whole decade in therapy and get into long weepy conversations over bottles of wine about how they can never have a healthy relationship because their father was so cold and distant, and their mother was a perfectionist harpy.

I mean, hey, it sounds like your parents were terrible. But this is not actually very useful information. Dad could get down on his hands and knees and admit that he was the most horrible father in the entire world, and beg for your forgiveness, and guess what? You’re still lonely and balding and drinking way too much mid-priced Chardonnay.

And that’s no way to live. Plus this:

The problem with the budget deficit is that, unlike the deficits George Bush ran, the deficits projected under Obama (and beyond) are actually large enough to potentially precipitate a fiscal crisis. If our interest rates suddenly spiked up, perhaps because lenders were worried about the size of our budget deficits, we’d find ourselves in the kind of nasty fiscal jam that regularly plagues third-world countries. The difference is, no one has enough money to bail us out.

Obama is the one who will have to prevent this. Yet instead of plans, we’re getting fairy numbers from the OMB. That’s worrying, and it’s sure not George W. Bush’s fault. His OMB liked to inflate the deficit projections, so that they could take credit for a mostly imaginary reduction.

I don’t think Obama realizes — or, more frighteningly, perhaps he doesn’t care — what this spending is going to do to the economy. After all, the free market is just a rival power center. As Tim Noah says: ‘On Wall Street, financial crisis destroys jobs. Here in Washington, it creates them. The rest is just details.”

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