Bush’s Failed Fiscal Policy…
Posted by jeremiasx on February 13, 2007
I’m going to post a few articles I think it would behoove many of us to read along with a link to the GAO comptroller’s recently released presentation on the effects of the long-term deficit. It’s time to get serious about our economic situation domestically before things get WAY worse than they are today…and they are bad today for most Americans.
WASHINGTON (AP) – The U.S. trade deficit set a fifth consecutive annual record in 2006, reflecting a huge jump in America’s foreign oil bill and an all-time high for the trade gap with China. The year ended with the December deficit increasing more than had been expected.
The Commerce Department reported Tuesday that the gap between what America sells abroad and what it imports rose to a record $763.6 billion last year, a 6.5 percent increase from the previous record of $716.7 billion set in 2005. For December, the deficit rose a bigger-than-expected 5.3 percent to $61.2 billion.
The annual trade deficit has set a record for five consecutive years, a development the Bush administration attributes to the fact that the U.S. economy has been growing more rapidly than the rest of the world. The administration argues that American consumers have benefited from the flood of cheaper imports, a development which has helped to hold down inflation.
But critics contend the deficits are a reflection of a flawed trade policy that has failed to protect American workers from unfair foreign competition.
They point to the 3 million manufacturing jobs lost since Bush took office and contend that more companies have been moving production offshore to take advantage of cheaper labor and lax environmental regulations.
Combine all this good news with the recent outcry from the GAO comptroller, David M. Walker, concerning the long term problems stemming from fiscal irresponsibility in current and past administrations, and it’s a recipe for disaster.
To analyze and monitor changes in the long-term fiscal outlook, GAO maintains a long-term model of the federal budget and the economy. This model was adapted from work done at the Federal Reserve Bank of New York. For over a decade, GAO has published the results of its long-term budget simulations in reports, testimonies, and other products. The model’s results dramatically illustrate the need for action sooner rather than later to address the long-term fiscal imbalance.
This web site presents information about the long-term fiscal outlook together with GAO’s latest simulation results.