The 500 Billion dollar U.S. Government Budget Deficit promises to be a major issue in the upcoming Presidential election campaign. Is this deficit truly a crisis? The United States' Gross Domestic Product is about 11 Trillion dollars, so the annual budget deficit is about 4?% of National Income. Those Billions and Trillions are hard for most of us to get our arms around, so let's look at it this way: a family with an income of $50,000 and a 4?% annual budget deficit would be falling short by $43.27 each week. Is that a problem? Certainly. Is it a crisis? An insoluable emergency? Hardly.
One of the ways the Government's budget deficit is different is that a family with this shortfall would look first for ways to reduce expenses by $45 per week. This is a consummately good idea, but it's not part of the Washington D.C. culture; so let's look at a family's second option, namely to increase their income by at least $45 per week. How? Work more hours, get a part-time job, change jobs, start a side-business, send a spouse into the workforce, get a raise, etc...
Giving the Federal Treasury an increase in income is precisely what President Bush has done by pursuing a pro-growth tax policy. As the economy grows, Government revenues increase, and if spending doesn't outpace the growth of revenues the deficits go away. What is the Democrat solution to deficits? Every Candidate still in the race for the Democrat nomination would "solve" the budget deficit by raising taxes, and thereby stifling the economic growth that would bring the Treasury more income.
Following the logic of every Democrat Presidential hopeful, the Democrat's financial advice to our struggling family would be to solve their $43.27 per week shortfall by working less hours, and reducing their income. At home, most folks would recognize that as the wrong approach. In Democrat presidential politics, such nonsense is approved conventional wisdom.