Hey, about that deficit...

Following up on the recent CBO report about the budget deficit:

"The message is that you cannot grow your way out of this," said Douglas Holtz-Eakin, who is director of the Congressional Budget Office and a former chief economist on President Bush's Council of Economic Advisers.

it might be time to go back and review this article by Paul Krugman in the New York Times, detailing a report from Robert Rubin, former Treasury Secretary, and earlier comments from Greg Mankiw, now chairman of the president's Council of Economic Advisers.

The biggest lurking problem with our deficit may not be that our grandchildren will be paying it off, it may be the catastrophic collapse of the dollar. (Can you say "Argentina"?)

The point made by Mr. Rubin now, and by Mr. Mankiw when he was a free agent, is that the traditional immunity of advanced countries like America to third-world-style financial crises isn't a birthright. Financial markets give us the benefit of the doubt only because they believe in our political maturity - in the willingness of our leaders to do what is necessary to rein in deficits, paying a political cost if necessary. And in the past that belief has been justified. Even Ronald Reagan raised taxes when the budget deficit soared.

But do we still have that kind of maturity?