By now it should be obvious to anyone with a brain that the deficit is out of control. I read recently that the current deficit is beyond our capability to pay it off and we continue to push it up higher. The only people who say that deficits don´t matter are corrupt politicians and their cohorts who want to continue to spend recklessly.
Unfortunately at the moment neither party is serious about reducing deficits. The Dems. Love to spend money and the Obama administration has been catastrophic at driving up the deficit. The Republicans like to talk about reducing government spending but we have not had a Republican president in this regard since Eisenhower. What the Republicans like to talk about are tax cuts but not much lately about spending cuts because the Republicans are as addicted to patronage money as the Dems. are. They love corporate welfare.
Lately we have had a lot of empty rhetoric about reducing the deficit, but that fact is that neither party wants to attack the real costs such as military spending, corporate welfare (agro subsidies, housing subsidies, Medicare, housing supports, Freddie and Fannie, etc.), inflated salaries, and the biggest of all, Medicare, which must be addressed first but won´t be because Medicare is both massive corporate welfare and a favorite entitlement of the powerful retired persons block. Instead of going after the real problems, they are arguing about how many millions to cut from the park service. It is like a family which needs to reduce spending by thousands and goes about it by trying to cut the bubble gum allowance instead of the mortgage. The Republicans, who never want to let a crisis go to waste, have tried to take an ax to their favorite cultural issues: NPR, Planned Parenthood, and the NEA.
In the end we have a deal to cut the deficit, but it is not serious. It is estimated that after all the drama, it will stave off the day of reckoning by about a week. If just cutting a marginal sliver almost shuts down the government, then what hope do we have to make the necessary substantial cuts? I see little hope.
I suspect that the government will continue to rack up debts and the FED will buy more and more treasuries, and refuse to raise interest rates until inflation really gets roaring. Ultimately we will pay off the debt by completely devaluing the dollar.