The Corner

When France Is Starting to Look Good . . .

Donald Marron has a very telling chart about what the U.S. primary structural deficit (which, if I understand correctly, is the long-term underlying deficit once you control for the variations due to the recession and focus purely on spending at all levels of government, so something like that) looks like compared to other countries. That deficit is high — the fifth highest, in fact.

As always, Marron’s post is worth reading entirely. His conclusion is straightfoward:

If you take these results at face value, they suggest that the United States will have to cut spending and increase revenues by a combined 8.8% of GDP between 2010 and 2020, a fiscal adjustment of around 0.9% per year. Imagine having to enact a permanent spending reduction or tax increase of $120 billion per year next year, and then do it again in each of the next nine years. Rather daunting.

Structural Primary Budget Deficits in 2010