Reason Foundation

Reason Foundation

GAO: Federal Fiscal Outlook "Unsustainable" in Light of Historic Debt, Entitlement Program Deficits

Leonard Gilroy
October 20, 2009, 12:51pm

This isn't exactly surprising news, but a new GAO report finds that the long-term fiscal outlook for the nation remains unsustainable, with rising debt and enormous future deficits in our largest entitlement programs. BTW, GAO's estimates do not factor in the current proposals for health care reform. The main takeaways from the report:

Commenting on the GAO report, Jason Mercier at the Washington Policy Center suggests, "Perhaps it is time to bring back consideration of a federal balanced budget amendment to the Constitution." State governments have to balance their budgets—why shouldn't the feds? While it's true that balanced budget requirements in state Constitutions cannot prevent fiscal crises, nor can they prevent state policymakers from using accounting gimmicks and other questionable methods to close budget deficits, they at least provide some ongoing fiscal reality checks and trigger course corrections that keep things from spiralling too far out of control.

Meanwhile, in DC, the lack of significant fiscal restraints promotes obscene amounts of debt and perpetual deficit spending, creating a policy environment in which officials are seriously talking about digging the hole deeper by expanding entitlements through health care reform, rather than reforming the unsustainable entitlement programs we already have. When your boat springs a leak, wouldn't you focus on getting water out of the boat rather than pouring buckets of water into it? Option A helps you stay afloat, while Option B accelerates the eventual sinking.

Leonard Gilroy is Director of Government Reform

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