The Cost of the Federal Deficit
Even after criticizing the Tax Foundation’s weblog, I still read it from time to time, as it does occasionally provide some useful insights. A particularly good one is Andrew Chamberlain’s post on “The $919 Per Person Deficit Tax“, which does a good job of describing in short form the real cost of the federal deficit.
While it’s obviously a very limited and one-dimensional analysis* (the stimulus provided by government expenditure over some periods could well result in a net benefit to running a deficit over those periods, for example), by laying out the costs imposed by the deficit, it’s a good first step to rationally discussing what steps should be taken to reduce it. There’s little doubt that it must be reduced; it’s generally agreed among economists that the federal deficit is one of the most serious problems facing the U.S. economy today. It is a difficult problem, though– it’s an issue that is seemingly esoteric and imposes consequences over such a long period that the returns to a politician for tackling it are usually far lower than the returns to the same politician for adding a little extra pork. The question, then, is how to address the issue– I’m sure the Tax Foundation isn’t likely to suggest higher taxes, although that may actually be a reasonable measure as part of a solution– and when it comes to cutting spending, what is the most efficient way to reduce government outlays? (I have a few suggestions for another time)
*it is, after all, just a blog post