The US Comptroller General says that
I’ve read only a modest amount of material on this topic, and that too with a layman’s understanding. What are the realistic consequences, taking realpolitik into account, if the US doesn’t take corrective action like the GAO head suggests - in the short term (10 years), and longer term (50 years)?
Keep in mind that the public sector is only half of the equation - the private sector is in a similar situation, with record debts and high spending.
Bear in mind that before G.W. Bush was elected, the U.S. Federal gov’t had a surplus.
People with more time than me can find you a city indicating the stated goal of small-government Republicans is that they want all gov’t programs eliminated. If they get their way (which at this point seems unlikely, but wait until the mid-term elections), you will see the elimination of Social Security, Medicare or Medicaid (I can never remember which one is federal, state, or if they both are, and not needing them I don’t much care), and all the other big-ticket federal expenditures.
Except the military. The PNAC (Project for a New American Century) says pretty clearly that the U.S. needs to keep its military dominance.
Hey, Barbarian:
Gyan: You call 10 years short term? 
Good luck. Predicting what the economy will be like 10 years out (much less 50) is a crap shoot-- you might as well just roll the dice.
Alright, forget the time spans? What are the realistic consequences?
No one knows. We are sort of in uncharted territory afaik. The economy is starting to seriously pick up…but the debt is rising (both public and private). Factor in the war and things like Katrina and even the residual effects of 9/11…and project whether you think some similar disaster might happen again in the next few years.
One thing you could look at though is how bad things were in the '70’s and early 80’s…and the boom of the 90’s. I certainly don’t remember too many folks predicting the turn around we experienced when Clinton was president. Its not the same situation by any means…just showing that things can and do turn around, and the economy is a hell of a lot better today than it was under Carter or when Reagan took over…in fact its probably better than it was except when it was really booming under Clinton.
-XT
Well, duh. Speculate as much as you’re comfortable with. This is GD.
Speculate ehe? I’m probably the wrong guy as I’m no economist nor do I play one on TV. I’m also singularly poor at using the old crystal ball and looking into the future.
Well, speculating that a fiscal conservative (as opposed to Gerogy boy) gets elected president in the next election, and further speculating that this president is able to influence congress in such a way as to get a large portion of his/her program instituted, and further speculating that his/her program includes cutting government spending (instead of increasing it) and perhaps a modest tax increase (not enough to slow down the economy) then I could very well see the deficit shrinking back to ‘normal’. This all assumes no more 9/11 type attacks, no new wars (and the ending of the one we have going in Iraq thats currently draining funds) and no new disasters like New Orleans.
Conversely we could get a fiscal liberal who will heavily increase taxes on the ‘rich’ while also increasing government spending. I think this would have the effect of putting the breaks on the economy but in theory (and if this new president/congress were disiplined in spending no more on their new toys than they would realistically bring in) this would slow down the deficit and perhaps go some way to reversing the present trend (see all the assumptions above). In other words, economically speaking ‘anything would be better than what we have today with Bush’ is my operative theme…even a fiscal liberal. Probably overly simplistic and maybe not even true (depending on who the fiscal liberal is and the make up of congress in the next term).
What do I think WILL happen? At a guess: I think that the economy will continue to improve but spending will continue to go up because we will be stuck in Iraq and probably entangled somewhere else within the next term or so, things like the WoT and general defense spending will continue to be a necessary drain, the same old social programs that aren’t working well will continue to absorb the largest portion of our funds, the odd national disaster will happen, etc. THis will continue on until we hit a wall, or until we have another boom like in the 90’s. If its the wall then it will take some painful choices and a few bad years to get us back on track.
-XT