The cost of the US deficit

Obama might be right that there is no alternative to the US running “trillion-dollar deficits”. But the $1.7 trillion deficit, its likely size in 2009, is truly alarming. Consider these comparisons that Kevin Hassett provides:

“The whole world’s military spending in 2006 totalled a little less than $1.2 trillion. So next year’s U.S. deficit could cover that and still have $500 billion left over for building bridges.

Perhaps the most disturbing comparison is this one: When President George W. Bush was first elected, total federal government spending was about $1.7 trillion. In other words, the difference between federal outlays and federal revenue this year will be bigger than the entire government was as recently as 2000.” These numbers mean that, at some point soon, serious entitlement reform is going to have to be enacted. I suspect that social security and medicare reform could come to dominate Obama’s second term. America cannot afford to keep kicking these cans down the road.