Note that what was said was that both cutting spending and raising taxes would be necessary in order to balance the budget. I endorse that for one simple reason--we've reached a point that cutting those costs that can be cut will not be enough to achieve a budget without an annual deficit. I did the analysis of the federal budget here once before, so I won't repeat it. What it boils down to is that debt service and entitlements make up too great a proportion of the budget compared to even a decade ago.

Debt service certainly cannot be cut. And cutting entitlements, as much as they should be cut, is virtually a political impossibility. If only the remaining items in the budget were candidates for cutting, those budget items would have to be reduced by about 50% to produce a non deficit producing budget, And that would include a 50% reduction in the defense budget.

Check the federal budget yourself and see if you can come up with enough spending cuts to produce a balanced budget without raising taxes. If you can, tell the rest of us how it can be done.

Very simply, the Chicago laureate was correct--the federal budget cannot be balanced without tax increases. Ultimately, that will happen and it won't make any difference whether the party in power are liberals or conservatives. The only question is whether our elected representatives will make the necessary tough decisions before external forces do it for them--the buyers of U.S. debt and the markets in which those debt instruments are sold and the value of the U.S. dollar established.