The Budget That Forecasts America's Decline
A recent analysis by David Sanger describes how US financial weakness is translating into the decline of its international power. He begins with a stark look at how the US deficit is projected to rise to 11 percent of economic output, but then goes on to explain…
“… the second number, buried deeper in the budget’s projections, is the one that really commands attention: By President Obama’s own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years.
“In fact, in 2019 and 2020 — years after Mr. Obama has left the political scene, even if he serves two terms — they start rising again sharply, to more than 5 percent of gross domestic product. His budget draws a picture of a nation that like many American homeowners simply cannot get above water.
“For Mr. Obama and his successors, the effect of those projections is clear: Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors.
“Beyond that lies the possibility that the United States could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country’s influence around the world eroded.”
Sanger is concerned about the projections, and yet despite the coming crisis the largest, and perhaps most paralyzing, problem has been to turn “thought into political action.” Read more of his perspective in New York Times coverage of how deficits may alter US politics and global power.