Fixing the Deficit By Doing Nothing

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Via Ezra Klein, here’s an interesting chart. CRFB’s Marc Goldwein shows us graphically the difference between the CBO’s “Extended Baseline Scenario” — which assumes current law just goes on forever — and its “Alternative Fiscal Scenario,” which is supposed to be a somewhat more realistic look at what Congress is likely to do in the future. Under the AFS, the budget deficit soars to 360% of GDP by 2050. But under the EBS (the bluish chunk at the bottom, modified to assume our wars end eventually) the deficit stays placidly under control forever:

Now, no one actually thinks that the EBS is realistic. Still, this is a fairly dramatic (and colorful!) way of making a point: if Congress just disbanded and let existing law continue forever, there would be no deficit problem. More realistically, if Congress let the bulk of current law continue (i.e., the Bush tax cuts expire on schedule, PPACA cost controls are allowed to take effect, etc.), drew down the wars in Iraq and Afghanistan, and simply agreed to pay for any changes that just have to be made (doc fixes, AMT patches, etc.), there would be no deficit problem. This is not quite as intractable a problem as Republicans would have us think. It’s only intractable if you refuse to pay for your spending.

There are more details on all this stuff at the link. It’s worth a quick read.

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