February 5th, 2010
10:51 AM ET

Budget fixes are simple - and unthinkable

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Fareed Zakaria | BIO
CNN Anchor, “Fareed Zakaria – GPS”

The solutions to America's long-term budget deficits are surprisingly simple, but they're politically unthinkable in today's Washington, says analyst Fareed Zakaria.

America's failure to deal with its growing budget deficit is hurting its image internationally, according to Zakaria. President Obama proposed a $3.8 trillion budget Monday, projecting a deficit of more than $1.5 trillion this year and nearly $1.3 trillion for the 2011 budget year.

Zakaria, author and host of CNN's "Fareed Zakaria: GPS," spoke to CNN Wednesday.

CNN: So the president released his budget this week, projecting deficits almost as far as the eye can see. What do you make of it?

Fareed Zakaria: The real problem is not the current deficits that the president has projected. These deficits are to a large extent inescapable because of the financial emergency we find ourselves in, the rescue of the financial system, the stimulus package to jump-start the American economy. But it's worth understanding why this gets us to 10 percent of GDP, the worst deficit since World War II.

And it is because, as the president points out, the budget was broken in the first place. It was broken by three decisions made during the Bush administration.

The first was to have massive tax cuts, which was a decision made in the wake of the Clinton surpluses.

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Filed under: Economy • Fareed Zakaria
soundoff (One Response)
  1. Tim Gibson

    The problem began in the surplus years of Clinton, is that not when the beginning works of massive home ownership for those who could not afford homes began. A wave that grew as value of homes climbed just because they could. On top of that wave we had Bush, and it hit shore.

    Personally I do not see how spending out of debt is a solution when that is what got us into this mess to begin with.

    February 5, 2010 at 2:14 pm |