The most pressing problem facing the United States today is not the federal budget deficit, the national debt, or excessive federal spending. It is the labor market. Yes, the United States does have a deficit problem, but we have a much more serious labor-market problem. In fact, for many workers, it’s a labor-market crisis. According to the Congressional Budget Office, the federal budget deficit is projected to remain more or less stable over the next ten years, fluctuating between 2.4 and 3.8 percent of GDP. (The 2012 deficit was 7 percent of GDP.) Of course, a deficit of 3.8 percent of GDP needs to be trimmed as the economy recovers. But it doesn’t need to be trimmed all the way to zero, and certainly not over the next ten years.
Our real and serious debt problem will be driven not by the next decade’s budgetary spending, but by projected spending on entitlements stretching beyond 2023. We must enact structural changes to our entitlement programs that will decrease future spending, but we should not — as the new House Republican budget does — make reducing the amount of federal spending set to occur in the next several years a higher priority than helping Americans get back to work.