Let me follow up on my post from yesterday with one more chart.
The problem with the US’s fiscal situation is not the fact that the federal government is running a budget deficit today. The problem is that it will run massive deficits as far as the eye can see into the future, even assuming strong economic growth. The problem is that in the next 10 to 20 years, given the Bush tax cuts that Greenspan supported, the Federal government’s debt will be extremely large. The problem is that by the next decade, the debt will almost certainly be having substantial negative effects on the economy (primarily through higher interest rates), and will certainly put the government in a poor position to do the borrowing that will be needed to fund the baby boomers retirement (see the Social Security debate here).
On the other hand, as the following chart shows, without the Bush tax cuts these problems would have been non-existent.