Financial Crisis

The Congressional Budget Office, in its mid-year long term budget forecast, has again warned that the U.S. is headed for a financial crisis based upon its level of debt.

This is the same warning that Congress and the White House didn’t take to heart last January. The really scary part is there are two scenarios. The Baseline Scenario and an Alternative Scenario. The Baseline Scenario is bad but the Alternative Scenario is a financial nightmare.

The Baseline Scenario assumes that tax rates will return to their 2000 levels by the end of 2012 and that Congress will enforce Medicare cuts mandated in a 1997 law. The CBO, in its Alternative Scenario, predicts that Congress will do neither of these two things.

I can’t take the Republicans seriously as long as they insist on not only maintaining the current maximum tax rate but are proposing to lower it significantly. I can’t take the Democrats seriously because they seem to act like a teenager who doesn’t realize that the credit card bill has to be paid someday.

Do I have a third alternative?