Higher taxes! Read the following paragraph, the last paragraph in the summary, from the publication titled The Long-term Budget Outlook – June 2009 published by the Congressional Budget Office.
CBO’s long-term budget projections raise fundamental
questions about economic sustainability. If outlays grew
as projected and revenues did not rise at a corresponding
rate, annual deficits would climb and federal debt would
grow significantly. Large budget deficits would reduce
national saving, leading to more borrowing from abroad
and less domestic investment, which in turn would
depress income growth in the United States. Over time,
the accumulation of debt would seriously harm the economy.
Alternatively, if spending grew as projected and
taxes were raised in tandem, tax rates would have to reach
levels never seen in the United States. High tax rates
would slow the growth of the economy, making the
spending burden harder to bear. Policymakers could mitigate
the economic damage from rapidly rising debt by
putting the nation on a sustainable fiscal course, which
would require some combination of lower spending and
higher revenues than the amounts now projected. Making
such changes sooner rather than later would lessen
the risks that current fiscal policy poses to the economy.
It is going to take the Republicans (lower spending) and the Democrats (higher taxes) to put the United States back on the path to fiscal health. How optimistic are you?
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