To finance the deficit, the Treasury will have to issue more debt—trillions of dollars worth of it. Between 2010 and 2020, according to OMB’s figures, the amount of federal debt outstanding will rise from fifty-three per cent of GDP to seventy-seven per cent, a level not seen since the aftermath of the Second World War. The White House’s numerical projections stop at 2020, but, largely due to an explosive growth in Medicare and Medicaid spending, the fiscal outlook thereafter is even more bleak—something Tea Party sympathizers, devotees of Rubinomics, and progressives can agree upon.
Read the rest of John Cassidy in The New Yorker on the return of Rosy Scenario.
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