Fiscal Red Alert

The Center for Budget and Policy Priorities warns:

It would be advisable for policymakers to act sooner rather than later on a package of credible deficit reductions, while delaying the effective date of some provisions by several years until the economy is in much stronger shape. Policymakers should also expect to return to long-term deficit reduction multiple times over coming decades; the problem is far too large to address in a single legislative package. For one thing, political limitations on the amount of pain that can be delivered in a single dose would make it unlikely that a single package large enough to put the budget on a sustainable long-term path in one fell swoop could be enacted. Just as importantly, uncertainty about key factors notably about the economy’s path and the future growth of health care costs mean that we cannot judge now the best way to solve the long-run problem once and for all. Nevertheless, policymakers should start soon to work on major policy changes.

(Hat tip: Ezra)