We Are Out of Money - Reason Magazine

Something so simple to understand and yet it is just totally ignored by our President and Congress.

 

We Are Out of Money

American governance won’t begin to inch forward until the political class faces basic facts.

Matt Welch from the June 2010 issue

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American conservatives, particularly the fiscal variety, tend to hold up the European Union as a model of irresponsible, big-spending economic policy. But consider this: According to E.U. rules, member countries cannot maintain budget deficits above 3 percent of gross domestic product; nor can their total debt rise above 60 percent of GDP. As Veronique de Rugy points out in this issue, the U.S. budget deficit in 2009 was three times the E.U.’s limit, and total debt will zoom past the 60 percent threshold sometime this year. Washington makes Paris look frugal.

In March the federal government created the most expensive new entitlement in four decades, even as the bond rating company Moody’s Investors Service warned that debt levels could soon precipitate a downgrade in U.S. Treasury bonds. The main opposition party fought the bill by decrying “cuts” to Medicare, and it has kept itself at arm’s length from one of the few politicians talking seriously about long-term reform.