The Deepening Crisis : The Real Score on Deficits and the Public Debt

In her state of the nation address before Congress last July, President Arroyo drew attention to the government’s worsening fiscal and debt problems, calling the deficit “our most urgent problem”. That was an accurate statement. The looming threat represented by an uncontrolled public debt is indeed the biggest economic challenge the country will have to confront immediately and for the remainder of this decade. Recent events and discussions give ample reason to doubt whether the President’s message has been truly understood and internalized by the political elite and public alike – and hence whether the issue will be given its due importance. The quality of public debate on the issue stirs grave doubts whether the scale and consequences of “our most urgent problem” are indeed being fully appreciated.