With the U.S. budget deficit to hit $1.6 trillion
in the current fiscal year, a post-World War Two record, grim
predictions are rolling in. Deficit spending is projected to remain
high for years to come. We explored the deficit's role domestically
, but what will it mean for America internationally?
- U.S. To Follow Japan's Decline? The New York Times's David Sanger notes
that President Clinton entered office with similarly grim predictions,
but he managed to reduce deficit spending to sustainable levels.
However, if Obama can't reproduce Clinton's success, it could be
Unless miraculous growth, or miraculous political compromises, creates
some unforeseen change over the next decade, there is virtually no room
for new domestic initiatives for Mr. Obama or his successors. Beyond
that lies the possibility that the United States could begin to suffer
the same disease that has afflicted Japan over the past decade. As debt
grew more rapidly than income, that country's influence around the
- Budget Deficit Doesn't Affect International Standing But the trade deficit does, the American Prospect's Dean Baker writes. "[T]he United States has been running large and unsustainable trade
deficits in recent years because of the over-valued dollar. The trade
deficits, not the budget deficits, have caused the country to become
the world's largest debtor," he writes. "If the
dollar and GDP were both at their current levels and the budget was
completely balanced, we would be borrowing just as much money from
abroad as we are today."
- Weakens Our Global Competition Former U.S. Comptroller General David Walker tells
Politics Daily, "we're reducing the role of investments in our future
because the budget
on the discretionary side is getting squeezed at a time when America is
facing growing competition in a global economy." Walker says that the
deficit, more than our ongoing wars, "threatens the ship of state." He
worries about China demanding higher interest rate lending, worsening
- End Of Imperial America Liberal blogger Steve Radamisto hopes so.
"Guns or butter? That's a question America will have to face very
soon," he writes. "I was disappointed that Pres. Obama didn't propose
cutting the DoD budget and I hope congressional democrats can force him
to do so." He hopefully points to the QDR to predict, "we may be relinquishing the neo-cons' dream of empire."
- Shut Down Afghanistan War Liberal blogger Prairie Weather thinks the solution is clear. "The fallout from all this isn't entirely bad. At least there are no
ifs, ands, or buts in the budget figures: we have to get out of
Afghanistan," he writes. "Maybe now is the time to begin working on the defense budget with our little icepicks."
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