You already know that last year’s federal budget deficit was almost $400 billion, the largest deficit in the nation’s history. Today we’ve learned, however, that we’re already on track to break last year’s record fairly easily.
Congressional auditors announced this week that the deficit for just the first three months of the 2004 fiscal year is already $126 billion. Since that only accounts for one-fourth of the year, we’re on track for a $500 billion deficit this year.
To hear the Bush administration tell it, there’s nothing to worry about. Treasury Secretary John Snow explained this week that a half-trillion dollar annual deficit is “entirely manageable.” (The Center for American Progress accused him of having an “inattention to deficit disorder.” I wish I had thought of that line.)
Unfortunately, few seem to share Snow’s confidence. The New York Times noted a scathing new report from the International Monetary Fund, which said the “United States is running up a foreign debt of such record-breaking proportions that it threatens the financial stability of the global economy.”
And, as the Washington Post noted today, the IMF is hardly alone in its warnings. “Several Wall Street economists have called on Bush to present a detailed plan for getting the nation’s fiscal house in order. In March, the Committee for Economic Development, a business and academic organization, broke with most of the business world and called for immediate action — including a halt to new tax cuts — to address the growing deficit.”
“It’s pretty interesting that there isn’t any party left, except the Republican Party, that isn’t saying there’s a problem here,” said William G. Gale, an economist at the Brookings Institution.
The administration’s response? We shouldn’t be alarmed because the president has a plan to shrink the deficit to $250 billion by 2008. I might feel a little better about this if the plan wasn’t based on total nonsense.