July 21, 2014

In the Eye of the Debt Storm

David M. Primo

Senior Affiliated Scholar
Summary

In its July budget report to Congress, the White House’s Office of Management and Budget praised President Obama for presiding over the “most rapid sustained deficit reduction since World War II.” The president also deserves credit, we are told, for a budget that achieves a core goal of “fiscal sustainability.”

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In its July budget report to Congress, the White House’s Office of Management and Budget praised President Obama for presiding over the “most rapid sustained deficit reduction since World War II.” The president also deserves credit, we are told, for a budget that achieves a core goal of “fiscal sustainability.”

In its long-term budget outlook submitted to Congress less than a week later, the nonpartisan Congressional Budget Office was less sanguine, writing, “Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing its debt to soar” to its highest levels as a share of the economy since World War II. Even worse, given current laws, the CBO warns that federal debt is on an “unsustainable” path.

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