Over at the liberal site Talking Points Memo, Brian Beutler has a post up that asks, “Are we really drowning in red ink?”  He goes on to argue that our debt isn’t unprecedented by historic levels when measured as a percentage of the overall economy, suggesting that all the fears of a debt crisis are overblown. Of course, the real problem we face isn’t the current deficits caused by the economic downturn, but the long-term debt from the growth of the major entitlement programs.

When the economy slows, it boosts deficits in two ways. First, it means that revenues sink. Second, it means higher spending, not only on stimulus, but on so-called “automatic stabalizers” such as unemployment benefits. Yet while this helps explain our problems over the past few years, as the Congressional Budget Office has warned, the real debt problems won’t occur until after the economy improves: