Whatever Republican Big Liars are spewing out, the fact is that we do NOT have a “spending problem,” we have a revenue problem, and a severe one at that — the lowest federal tax revenues as a share of the economy since about 1950. The main causes of that revenue problem: 1) the Bush tax cuts (cost: $4 trillion a decade); 2) the Republican Great Recession, which has further reduced tax revenues; and 3) to a lesser extent, the budget deal cut between Republicans and President Obama late last year, which reduced federal revenues even further.
Given all this, what does Congress needs to do in order to get our budget back into balance, or even surplus where it was when Bill Clinton left office? Very simply, this: NOTHING!
On Wednesday, the Congressional Budget Office released its updated long-term budget forecast, which looked surprisingly like the previous version of its long-term budget forecast.
Helpfully, CBO juxtaposed these two alternative futures in a pair of graphs and, just as last time, it projects that deficits will disappear entirely by the end of President Obama’s second term (if he gets a second term) if Congress were to just sit on its hands and do nothing.
Take a look.
Any further questions?