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December 09, 2005

Economist's View: Greenspan: Social Security and Medicare Must Be Cut to Solve the Budget Deficit Problem

Mark Thoma finds Alan Greenspan wanting the 1990 Budget Enforcement Act PAYGO restrictions back:

Economist's View: Budget Deficit Legerdemain....

The positive short-term economic outlook is playing out against a backdrop of concern about the prospects for the federal budget over the longer run. ...[T]he latest projections... suggest our budget position will substantially worsen in the coming years unless major deficit-reducing actions are taken. As I recently testified, the necessary choices will be especially difficult to implement without the restoration of procedural restraints on the budget-making process.... Reinstating a structure like the one formerly provided by the Budget Enforcement Act of 1990 would signal a renewed commitment to fiscal restraint and help restore discipline to the annual budgeting process.... I do not mean to suggest that the nation's budget problems will be solved simply by adopting a new set of budgeting rules. The fundamental fiscal issue is the need to make difficult choices among budget priorities....

Posted by DeLong at December 9, 2005 10:21 AM