Nor can the new government rely on more revenue to plug its fiscal hole.
Waste and lower growth because of poor tax policy will only make the fiscal hole harder to fill.
So, state legislators are in a much deeper fiscal hole than they realize.
So what will Japan do to dig itself out of its fiscal hole?
FORBES: Averting a Greece-Like Crisis: The Noda/MOF Plan for Fiscal Reform
It seems impossible to dig ourselves out of our fiscal hole by spending cuts even though we should certainly try.
Although everyone recognizes the country's fiscal hole, investors have embraced Japanese equities, pushing up their indexes by 25% in 2005.
Compared to many European countries, America's fiscal hole is indeed long-term.
Now, even as health care reform would reduce our deficit, it's not enough to dig us out of a massive fiscal hole in which we find ourselves.
The Obama Administration already provided an indirect short-run bailout as part of the so-called stimulus legislation, and this encouraged states to dig themselves deeper in a fiscal hole.
When a Eurozone country is in dire fiscal straits or breaks the stability pact (Germany and France like to flout its rules), fines just make the fiscal hole deeper.
Of all the bad news unveiled today by the chancellor this might well be the worst: after two and a half years of austerity, the Office for Budget Responsibility (OBR) is likely to say that the fiscal hole that Mr Osborne promised to eliminate in five years, back in May 2010, is actually bigger now than it was then.
Even if the EU elites have a desire to continue flinging billions of euros into the fiscal black hole that Greece has become, the taxpayers supplying those euros do not.
The NHS, however, is a fiscal black hole, and, with new and ever more expensive medical technologies and drugs coming on stream, even this spending boost may not be enough.
In fact, the Chinese appear to be filling a funding hole created by the U.S., which under fiscal pressure has been cutting aid to Latin America, a trend that continued into the 2013 budget proposal.
But scaling back monetary and fiscal stimulus will be easier than digging the world economy out of a deflationary hole which, if the OECD's forecast is right, remains an uncomfortably large risk.
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