Commentary

Hello, Cliff!

It seems as if America’s fiscal situation is rolling quickly toward
the edge of a big scary cliff. The nonpartisan Congressional Budget
Office (CBO) warned earlier this week that the combined forces of
a weakening economy and high maintenance costs associated with
fighting two wars is causing the federal budget outlook to darken
significantly over the next few years.

The CBO estimates the federal budget deficit will soar by almost
$250 billion to reach $407 billion this fiscal year. Marketwatch
noted that in February the CBO predicted the federal budget would
flirt with balance ten years out. Now their crystal ball shows a deficit
of $2.3 trillion over the same span- my what seven months of job
losses, slumping corporate profits and sinking home prices can do
to a nation’s balance sheet.

Although the CBO includes the financial drain caused by fighting two
wars in the calculations, it assumes that the Bush era tax cuts will
not be extended. (If the Bush tax cuts are reanimated, they project
the deficit would be $4.2 billion larger by 2018.) They also assume
that the Alternative Minimum Tax will continue to fill federal coffers
by molesting the incomes of more and more unsuspecting upper
middle class citizens.

Come January 2009, the CBO’s estimates will become even more
dismal as a new administration takes the wheel. If the wacky team
of McCain/Palin is in charge, Bush’s tax cuts will be extended to pump
life into the economy- and oil wells will be visible from every
American patriot’s window. If cult leader Obama steps in, taxes will
increase, but not nearly enough to cover spending on the grand
ambitions he has for his followers- although the free Cool Aid will
make everyone feel much better.

©Greg Strid 2008

© 2008 Splendid Marbles.