So, the recent numbers suggest the short-term (next few years) outlook don’t suck as bad as it used to: deficits significantly lower than previously projected and debt as a percentage of GDP holding steady. Ross Douthat has an interesting summary of why everyone hates these numbers (except the Obama administration). Nothing to get giddy about, to be sure, but better than bad news.
The long-term fiscal picture of the US is still scary; entitlements are still un-reformed; the expansive federal state continues to march on mostly unabated, sucking up economic capacity and squashing the entrepreneurial spirit. But, you know what I think is still the most likely outcome, the only one that is backed-up by roughly four centuries of evidence?
America is still likely to outgrow all the problems our knuckle-headed leadership in both parties have created for us. It always has before.