Gobbling Up the Economic Pie
Special Report March 1984
Executive Summary While deficits dominate fiscal discussions, they are not the fundamental fiscal problem confronting the U.S. and, for that matter, the Western world. The fundamental problem is the relentless tendency for government to pre-empt a growing proportion of the national income and output.
The deficit projections leave one with the feeling of standing on the edge looking into an almost limitless abyss. In his Budget Message, the president does project a deficit declining from this year’s estimated $184 billion to $123 billion by 1989, with outlays in that year of $1.183 trillion, and receipts of $1.06 trillion. (These figures are about the size of the total gross national product in the early 1970s.) But this substantial shrinkage assumes some legislative actions proposed by the president, as the Budget Message is a pricing out of his proposed program, not a mere prediction of statistical things to come. On the basis of current tax and spending programs, however, the deficit for fiscal 1989 is projected to be $65 billion to $70 billion larger. And with so-called off-budget items included, the projected deficit for that year could be in the $200 billion zone.