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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (110224)	12/18/2007 8:41:12 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

KT, I think the best way to measure these things is by using both cash and accrual accounting (even though the latter is a very rough estimate) and then to compare that to GDP. Both deficit measures have some significance. I don't think the current cash deficits are outrageous as a percentage of GDP even though the absolute numbers are large. You can run bigger cash deficits when the pie is a lot larger without it being a big issue. It's the present value of the future liabilities for out of control programs that is the long term problem. The significant current problem is that we are running these moderate cash deficits as a % of GDP while the economy has been good. So on a normalized basis (as I described with the Clinton scenario) the performance is worse than it looks. If the next president inherits a recession (as Bush did and is somewhat likely), he's going to be faced with much bigger deficits than Bush is looking at now.