Stimulus today, federal debt tomorrow

News reports today say that President Obama has rediscovered the federal budget deficit, and he's going to promise to do something about it. Good for him.

There has been little discussion of the budget deficit or how our grandchildren will repay all this money as Congress has debated the stimulus package. We are now looking at annual budget deficits in excess of $1 trillion! Remember all the grief Ronald Reagan took when deficits under his watch reached $100 billion? Several times that amount has disappeared into the banking system in the past six months, and no one seems to know where it has gone.

Obama says he wants to cut the deficit in half by the end of his current term. If that promise sounds familiar, it should. George W. Bush expressed the same wish, and I seem to recall Reagan and George H.W. Bush making the same or a similar promise. Funny thing about cutting something in half: You can cut by half for 50 years, and you never quite get rid of it. Still, it's a starting point.

Few economists fault Obama's push for federal spending to bolster the feeble economy. Now, they say, is not the time to worry about deficits. But we will need to worry about deficits sometime, and Obama deserves some credit for bringing up the topic now. After spending trillions of dollars salvaging banks and boosting the economy, cutting the deficit will be difficult.

Obama is calling a meeting this week to discuss long-term budget problems, which includes the long-term insolvency of Social Security and Medicare. Democrats, whose campaign rhetoric denied any problem with Social Security's finances, have to tackle this issue. George W. Bush's futile effort to shift SS investments to the stock market never got going, and all Americans are now grateful for that, since the market has lost nearly half of its value in the past year or so. The federal deficit is greater than usually acknowledged because Social Security revenues now mask the depth of the deficit.

The nation's long-term fiscal health depends upon finding a solution to the Social Security and health care problems. The federal debt has now topped $10.8 trillion, which is more than two-thirds of the gross domestic product of around $14 trillion. Annual payments on that debt are around $500 billion, nearly as much as the Defense budget. As a nation, we cannot sustain this forever. Obama is right to address the deficit issue now and to think ahead about how we are going to get our spending back into balance and thereby provide for the economic growth we and our grandchildren will need.