OK, that does not roll off the tongue as nicely as rearranging deck chairs on the Titanic. But either metaphor serves in the case of our elected federal officials and the deficit.
Let us begin with an old chart from the Congressional Budget Office via our, ahem, good friend Ross Perot:
This chart is a bit dated, but the curves have not changed much. Future deficits are the result of medicare/medicaid and interest. The last being the same as saying future deficits are the result of future deficits. If future deficits can be brought under control, then the interest payments will take care of themselves.
Want something more recent?
This is from February 25th, 2011. It assumes that the Bush tax cuts will expire and that the Obama stimulus tax cuts also expire. Note that the growth of health spending goes from over eight percent of GDP to 12% of GDP while the total deficit at that point is 3.2 percent of GDP. So the entire projected deficit in 2021 could be attributed to the growth of medical spending.
The Affordable Care Act (Obamacare) actually includes several measures intended to bring down medical costs. The CBO grades the Act as lowering the deficit even though they did not take many of the cost saving measures into consideration on the grounds that the measures had not yet shown they would work (they were not even law at the time…).
So the only serious deficit reduction effort in Washington today is the Democrats defense of health reform. Obama freezing spending and the Republicans talk of cutting spending amounts to nothing more that delegating powers to the vice president in the Mubarek administration.
Oh yes. If you want to clear up the short term deficits, this chart might prove useful:
For good or for ill, the spending that the Republicans want to cut is there for a reason. People like it. That spending is popular. War, the Bush tax cuts, and the recession drive the short term deficit.
Even if the wars end tomorrow, the savings there will be minimal. Something else will come along. It always does.
Many of the cuts the Republicans propose would actually weaken the economic recovery and so increase the deficit.
The Bush tax cuts should be allowed to expire. All of them.