Go talk to the Republican Party folks. They allowed this to continue past August with the debt ceiling vote and they've allowed this through passing "continuing resolutions" where they had the ability to stop them in the Senate (since there was no filibuster-proof majority) all the way since George Bush was President.(Emphasis removed.)
When George Bush was President the gross reduction (in 2007) to address this was about 25%, not 43%. It was still horrific, but not as bad.
Nobody from either party is telling the truth. It doesn't matter: Right now responsibility rests with the party that can put a stop to it here, now and today.
That party is the Republican Party.
The GOP's success in the 2010 election was due in part to a lot of people wanting this done. (Self included.) As for me I didn't need to see the kind of draconian cuts Denninger says is necessary to prevent a collapse; as long as I saw the GOP getting serious about making real cuts to spending and establishing some kind of timetable where we'd arrive at a balanced budget on their watch it didn't all have to be done at once.
Instead, the GOP tried blowing sunshine up our skirts. The cuts they made were accounting tricks and reductions in the rate of growth; and they were so small that even if they'd been real cuts they would never have actually reduced the deficit simply because of the relative sizes of the numbers.
I say the "cuts Denninger says is necessary" but in fact they are necessary; sooner or later the federal government must stop spending money it doesn't have, either voluntarily or because it's reached the Thatcherian end of socialism and has run out of other peoples' money. If it's done voluntarily we'll have some semblance of control over how things pan out: like an airplane crash at an air show, the pilot can sometimes direct the airplane away from the crowd. But if we end up there by default it's going to be more like a DC-10 losing an engine and flattening half a Chicago suburb.
Either way, there's an aluminum rock falling from the sky.
Denninger figures that if we'd taken action in 2007 it would have required a 25% reduction in government spending to fix the problem.
So now we need to reduce spending not by $1,700 billion but that plus about another $500 billion for the tax impact, for a total of $2.2 trillion out of $3.7 trillion spent. About $500 billion of our spending at present is interest so this means we have: $3.7 - $2.2 - $0.5 = $1 trillion in total actual federal spending available to us out of an original $3.7 trillion.Four years later it's 60%, assuming $1,000 billion in spending and $500 billion in debt service for a total federal budget of $1,500 billion. This will be disastrous for our economy, but this is where we need to be to avert an even bigger disaster.
So: we're a couple of months away from the beginning of the big 2012 election cycle. Going into next year I'm already skeptical of any politician who campaigns on deficit reduction; it's going to take a lot for anyone to convince me he's actually going to do something about the deficit that doesn't include any "extend and pretend" and a little "(R)" next to his name is not going to mollify or mitigate that skepticism one whit. It would have before August of this year; but not any more. That ship has sailed.
I find it hard to believe that I'm the only person who feels that way.