Is the U.S. Really on the Brink of Budget Collapse?

By Robert Pollin, AlterNet
Posted on September 17, 2009, Printed on September 17, 2009
http://www.alternet.org/story/142625/

Is the United States government facing “fiscal suicide?” Are U.S. Treasury Bonds “heading for the dumpster?” Such claims have been published regularly in the mainstream media following the passage of the Obama economic stimulus program, which became law last February (these particular quotes were in the New York Times and Bloomberg News last May). Of course, the Obama stimulus program was implemented to counteract the economic disaster that was already at hand as of last February and continues to the present.

In fact, the stimulus program is too small relative to the magnitude of the crisis and too loaded with corporate tax breaks. But it is still among the most progressive pieces of economic legislation since the 1960s. Of the $787 billion total in new government spending being pumped into the economy over the next two years, major funds are flowing into clean energy and traditional infrastructure investments, health care, and education, as well unemployment insurance, food stamps and similar measures to support people who are suffering most severely from the crisis. Overall, the stimulus program aims to generate about 3.5 million jobs over the next two years, to compensate at least in part for the nearly 7 million jobs the economy has shed since January 2008.