Washington Post repeats “inherited” deficit fallacy

(By Ed Morrissey, Hot Air) - Is it too much to ask that political reporters and their editors pass a basic civics test? Joel Achenbach isn’t the first reporter to refer to the ballooning federal deficits as something Barack Obama “inherited,” but one might have thought that the editors of the Washington Post might have finally flipped through a basic primer on legislation and spending, as well as recall when the FY2009 budget actually got passed:

But it may not be boring forever. The United States owes investors nearly $8 trillion. That number could more than double in a decade. The projected growth of the federal debt is widely viewed as unsustainable. It’s unlikely that the nation will ever default, but neither is that any longer unthinkable.

President Obama is expected to address the burgeoning debt in a major economic speech Tuesday in Washington. He inherited a huge deficit, and there’s nothing but red ink as far as the eye can see. The administration has estimated that there will be $1 trillion-plus shortfalls through 2011, followed by $700-billion-plus shortfalls through 2019.

Whopper budget deficits for so many years will mean that the cumulative debt will creep up as a percentage of the nation’s gross domestic product. How much debt the country can handle is debatable. The problem is that, if investors think the United States isn’t fiscally responsible, they could start demanding much higher interest rates when they bid on Treasury securities. The feedback loop could get ugly. The nation could have to borrow hundreds of billions just to pay interest on what it owes. This has been touted as a classic path to irreversible national decline.

“Right now, this year, we have 1.6 trillion in debt coming due. That’s roughly twice individual income tax revenue. Our only plausible strategy for paying that back is to borrow more money,” says Leonard Burman, an economist at Syracuse University.

Well, that’s not exactly true, Dr. Burman. We could start cutting the size and cost of the federal government instead of expanding it. We could then use the money we save to start paying off some of our debt, as well as use the increased revenues from better economic performance that would result.