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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (16236)	4/7/2010 9:28:08 AM
From: Alighieri	1 Recommendation Read Replies (1) \| Respond to of 42652

Obama's cure is to increase them. What's causing the trillion-dollar-plus deficits from fiscal years 2009 to 2011? Despite widespread perceptions that economic stimulus spending and government bailouts of troubled financial institutions are largely behind the ballooning deficits, those temporary programs actually account for only a fraction of the budget shortfall. The primary factors are long-standing imbalances between taxes and spending, plus the deep recession that reduced tax revenue and increased outlays for safety net programs such as unemployment insurance and food stamps. With wars in Iraq and Afghanistan, spending for national defense has surged about 140% since 2000 -- to $722.1 billion projected in 2010. Government spending for Medicare has gone up even faster in the last decade, to $462.1 billion in 2010. At the same time, personal income taxes were cut earlier in the decade under the George W. Bush administration. Is the deficit too large? Many economists consider deficits in excess of 3% of a nation's annual economic output (gross domestic product) as unsustainable. The United States' $1.56-trillion deficit this fiscal year is estimated at 10.6% of its GDP. The White House forecasts the deficit to stay above 3% of GDP for the rest of this decade. So by traditional economic measures, the present deficits are much too large to sustain. Should we worry about the deficit now, or is it a threat primarily down the road? Most economists say the main concern is for the future. Right now, with the economic recovery still uncertain and the unemployment rate in double digits, many say the focus should be on providing enough government support to ensure GDP keeps growing at a solid pace to start creating enough jobs. Slashing the federal budget now could tip the country back into recession -- and probably make the deficit problem bigger. At the same time, presenting a budget that is credible and has a realistic plan to reduce future deficits is important for reassuring holders of U.S. government debt. Failure to do so could heighten fears of rising inflation in the future, which could spark higher interest rates in the short term.