"'And while President Obama was right to focus on the economic recovery before reducing the deficit, he has yet to make any of the hard choices necessary to deal with the budget deficit.' That's a fair point, made by a consistent voice."

Ummmm, hello!, key sentence here. Does Mr. Gross have faith that Obama will eventually make the hard choices? I do not. I wish I did. I supported him in the election because I thought he might. Then he came to power and engaged in the same old budget shenanigans everyone does, concluding with the assertion that most of the healthcare reform money will come from savings in current programs. Bull-effing-puckey. No doubt most of the current deficit hawks are acting in bad faith. I don't particularly care for most of them either. (Although I am glad that somebody's complaining about the deficit, even if not for the right reasons.)

At the end of the day we have two choices (or a bit of both):

1) Have the government do a lot less.

2) Tax everybody a lot more. (Looking at the numbers I can't believe the burden can be completely shouldered by "the rich").

I haven't heard any major national politician speak this truth plainly, much less actually act on it. Obama ain't gonna do it either.

or C. cut the military budget in half, close most of the bases around the world the taxpayer is unconstitutionally having to support, and apply the savings to both health care and paying down the national debt.

That's cool with me, that'd fall under "Have the government do a lot less". Do you think Obama will do it? I don't. And cutting the defense department in half wouldn't be enough to cover it. I can find numbers if you'd like.

yes, actually i do think this is coming in the not too distant future. in fact, we are already on this path.

we have already closed several bases, and afghanistan was the experiment to test the hypothesis, it's the occupation they fucked up.

we now have such superiority in warfare over the rest of the world, it's going to take them at least 20 years to catch up, and that aint happening. if it were not for nukes? america would be the new Roman empire.

That's great, I hope you're right. Now according to the current cbo estimate (yeah, estimates are always sketchy but let's go with it) the 2012 deficit is $590 Billion.

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the current US defense budget, I believe this includes supplemental appropriations, is $651 Billion. So we cut off half of that and we get $325 Billion in savings. That brings us to a mere $265 Billion deficit in 2012. Much better... but still $265 Billion. And of course we haven't yet contributed a dime towards healthcare.

ah, but the current deficit is a temp thing though. it is exacerbated twofold, one in the need of the government to pump money into our economy to prevent a total economic collapse, and secondly, the tax cuts for the rich that were one of the most irresponsible acts in my lifetime.

while the deficit is high, and I agree needs to be addressed, it's not the hyperbole it's made out to be. we've ran much higher debt in times past.

as for health care, until we go to a single payer system, and regulate this industry better, it's always going to milk the working american dry.

"that most of the healthcare reform money will come from savings in current programs. Bull-effing-puckey."

1) What's wrong with the CBO analysis?

2) There are taxes in the bills.

"ah, but the current deficit is a temp thing though. it is exacerbated twofold..."

I wasn't using the current deficit, I was using one three years in the future, presumably after the current situation is over, that is far smaller than today.

As for the CBO analysis of the current Medicare plan, Megan McArdle's had a lot of good posts on it.

Such as this one:

"This bill will not actually deficit neutral; it's just scored deficit neutral. This is not the fault of the CBO, which is doing its job. But the bills are loaded down with a bunch of "automatic spending cuts" and similar gimmicks which are very unlikely to happen. We did the same thing with Medicare in the Balanced Budget Act of 1997, and by 2003--i.e., the first year that the cuts really started to cut--Congress had mostly undone them.

Doug Elmendorf, the source of that "deficit neutral" score, has made it pretty clear that he does not think the cuts will take place; he's just scoring them because that's what the CBO process requires him to do. After all, the reason that we need these automatic spending cut mechanisms is that Congress can't make a credible committment to cut costs now. And the reason they can't be relied upon to cut costs in the future is that doing so is politically costly."

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I hope she's wrong. But I'm worried she's not.

Interesting link. Her point about low hanging fruit and future political capitol is probably her best point.

On the automatic cuts, aren't these all in the event that projected savings don't materialize?

absolutely, this whole health care bill is pure smoke and mirrors, and I must say, in good cop bad cop the 2 parties are milking this one good.

Quite honestly I don't know. There have been a lot of versions of the bill thrown around and I am far, far, far from a healthcare wonk. What I've heard doesn't pass my smell test (I'm speaking deficit wise, not of the good it might do in actually getting sick people doctors), which is why I mentioned it in my original post. But it's really a symptom of the larger issue, the government spending more than it takes in. Even if healthcare proves to be completely deficit neutral we still have an unpleasant fiscal future.

First, now is just not the time to be worried about the deficit. While we can keep our eye on additional spending, the worst thing we could possibly do is cut government spending in a time of economic crisis such as we have now- it would achieve little except taking that much more money out of circulation.

Second, tax rates are at an historical low. Simply by undoing Bush's tax cuts- putting them back to the level they were under Clinton- we could make significant progress towards balancing the budget. While now would be a bad time to do so because of the recession, once we are fully recovered you could hardly argue that such an increase would cripple the economy since we did just fine in the 1990s under those rates.

I agree that right now is not be the time to cut the deficit. But it does need to be done and we have ugly projections as far as the eye can see. This is my concern.

I think that 2012 CBO deficit of $590 Billion includes the undoing of the Bush tax cuts which are set to fully expire 1/1/2011. If they do not, I would be very interested to know. Can anyone confirm?

OP-

Well said. I shared with you your skepticism about Obama actually delivering anything transformative. Glad I didn't vote for him. As for the country turning things around, nothing I have seen in my admittedly short period of following politics closely (15 years) leads me to believe anything moving towards positive change can make it through Washington anymore.

It is all fingers in dikes from here on out.

Luckily technology and general learning/processes etc. are keeping things improving.

We won't really have a fraction of an idea what the budget deficit for 2012 is going to be until after the health care and climate change bills are decided on.

That said, from Jan to August the budget deficit projected for 2012 increased by more than 120%... mostly due to a prediction of a far reduced revenue... Since August, we've seen GDP numbers FAR exceed what was predicted, so in the next revision of the CBO projections we'll see the budget numbers change in a manner that reflects a more rapid growth target.

This will work out well for Obama and the democrats, because everyone's tossing about this REALLY BIG set of numbers for now, and after January they'll be able to claim that they reduced the deficit from what was projected by X... The end result will be that whatever the numbers look like after the health care and climate change legislation pass, the budget prospects will look far better than "expected".

It's somewhat telling that the final numbers for the deficit for FY 2009 beat their prediction by several hundred billion.