Facing the Facts: We Are Out of Money

By Matt Welch, Reason - May 14, 2010

American conservatives, particularly the fiscal variety, tend tohold up the European Union as a model of irresponsible,big-spending economic policy. But consider this: According to E.U.rules, member countries cannot maintain budget deficits above 3percent of gross domestic product; nor can their total debt riseabove 60 percent of GDP. As Veronique de Rugy points out in thisissue, the U.S. budget deficit in 2009 was three times the E.U.'slimit, and total debt will zoom past the 60 percent thresholdsometime this year. Washington makes Paris look frugal.

In March the federal government created the most expensive newentitlement in four decades, even as the bond rating companyMoody's Investors Service warned that debt levels could soonprecipitate a downgrade in U.S. Treasury bonds. The main oppositionparty fought the bill by decrying "cuts"� to Medicare, and it haskept itself at arm's length from one of the few politicians talkingseriously about long-term reform.


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