Lost (so far) in the debate over the federal deficit and debt ceiling is perhaps the most basic question: What is the goal of federal deficit reduction? That is a key point for Congress to keep in mind as it goes about putting together a long-term deficit reduction plan in the next two months. Is the goal to achieve balanced spending first and let the debt situation catch up, or is it to reduce the federal debt to a certain goal and let spending adjust? According to the Congressional Budget Office (CBO): Balancing the federal budget by 2020 would require policy changes that save roughly $1 trillion in that year relative to the baseline (with interest savings contributing the remaining deficit reduction). Maintaining a balanced budget in...

TAGS – North America