The Budget is Balanced... Long Term!

Here is an interesting discussion between Brad DeLong and Michael Kinsley discussing the financial crisis, the Great Recession, the need for more stimulus, the debt/deficit scare, and the US federal budget.

I was pleasantly surprised to hear that the CBO (Congressional Budget Office) now says that thanks to the health care reform, the 75 horizon for the federal budget is balanced. There is no need to cut entitlements or impose new taxes. Funny... I didn't hear about this in the ordinary media. I'm surprised by hearing it hear. People should be shouting from the rooftops. This is great news.

Watch the video and learn other new and surprising facts about recovering from the Great Recession...



I'm amazed at the mastery of detail that DeLong has. He notes that the expected shortfall between federal tax revenue and federal spending was 2% of GDP. He points out that the Obama's stimulus bill raised long term debt by 0.03% of GDP while Obama's healthcare did 40 times as much good in restraining government expenses, that's why there is no longer this 2% gap and now the budget is balanced over 75 years.