Is Our Deficit Too Big?

The Bush Administration says we shouldn't worry. We ask the experts

By next year, the difference between what the government spends and what it collects in taxes will exceed $450 billion, thanks to two years of tax cuts, hikes in defense spending and a falloff in tax revenue. The ballooning deficit has sparked a fierce debate among economists. Deficit hawks argue that, like credit-card balances, deficits may not hurt much in the short run but will eventually wreak havoc. In the worst-case scenario, the government keeps borrowing to finance itself, and interest rates rise. That retards growth by making mortgages, car loans and corporate investment more expensive. The Bush Administration argues that...

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