Times sure have changed. Back in the good old days of Cold Wars and Mutually Assured Destruction, Americans were coached on measures they should take in the event of an unexpected Soviet nuclear strike. Among the most nonsensical was the concept of duck-and-cover – the idea people might survive a nuclear blast by crouching under a desk. Naturally, our betters in Washington saw fit to spend billions building intricate, secure underground bunkers for themselves and their families in the event of such an emergency.
The rest of us? Left to cower under the dining table like dogs fleeing the vacuum cleaner. Then again, who would want to live in a world where the survivors envy the dead?
Maybe we’ll get to find out. Seems the non-partisan Congressional Budget Office has reviewed the latest Obama budget which, lo-and-behold, would add another $3.5 trillion to the debt vs. the $3.2 trillion in saving Obama claimed.
CBO: Exploding debt under Obama
By: David Rogers
March 16, 2012 11:29 AM EDT
The Congressional Budget Office said Friday that President Barack Obama’s tax and spending policies will yield $6.4 trillion in deficits over the next decade, more than double the shortfall in CBO’s own fiscal baseline — even after taking credit for reduced war costs.
House Republicans, slated to unveil their own plan next week, are sure to seize on the numbers, yet the mountain of data gives reason for both parties to pause going into what’s expected to be a major fiscal crisis after the November elections.
The GOP has been quick to fault Obama for excess spending. But more than three-quarters of the $3.5 trillion in added red ink can be explained by what is still a rich diet of tax breaks continued by the president — but not under the CBO’s baseline.
Indeed, in the case of discretionary appropriations, CBO scores the president as coming in about $4 billion under the $1.047 trillion target set by the Budget Control Act last summer.
For the current fiscal year ending Sept. 30, CBO is now projecting a shortfall of $1.3 trillion. In fiscal 2013, the deficit will still hover near the $1 trillion mark — about $977 billion.
You see, Obama isn’t a free spender. It’s just that taxes aren’t high enough to cover his miserly ways. If you look at the last two sentences above, you see it’s actually kind of true. Discretionary appropriations are $1.043 trillion under Obama’s budget, the CBO is projecting a $1.3 trillion deficit this fiscal year. Even if discretionary spending was zeroed out $250 billion would be added to the deficit. The deficit is baked into the cake.
How about some terrifying chart-fu:
Much of Washington’s annual spending is entitlement spending – to which Obama’s signature legislative accomplishment will only exacerbate. Obamacare is already forecast to cost twice what we were told. That figure is certain to be far, far higher than we’re being told today. And assumes the scheduled cuts in Medicare reimbursements won’t be forestalled as they have every time the Doc Fix comes up for a vote in the past.
Oh, and there are a whole lot of Baby Boomers about to enter the Medicare and Social Security rolls.
So we can safely surmise it’s all Bush’s fault, right? If it hadn’t been for the Bush Tax Cuts for the Rich© Washington would be flush with funds and everything would be alright. That makes a compelling argument except for the fact tax receipts are more a function of economic growth than tax rates.
Beyond that, while individual income taxes are the largest source of government revenue they’re not a significantly larger source than payroll taxes. Obama has pushed for and received reductions in payroll taxes. Worse still, with real unemployment in the neighborhood of 15% payroll tax receipts are doomed to remain low until the economy fully recovers.
Add to that a trillion dollar stimulus package which permanently raised baseline spending and a Democrat-controlled Senate that hasn’t passed a budget in over three years and it’s pretty obvious there is no conceivable way for tax receipts to cover spending. The largest percentage of tax receipts vs. GDP since 1960 was 20.3 percent in 2000. Spending will be higher as a percentage of GDP than that historical high every single year of Obama’s presidency and is now forecast to reach over 26% by 2021.
At those rates the annual deficit will be 200% of tax receipts by 2030. In a best case scenario. God forbid Obama is re-elected we will see the National Debt accumulated over our previous 230 years of history doubled in just eight years.
On the plus side, there is no conceivable way the political class in Washington will be able to safely sequester themselves from the resulting debt explosion. They will come to find that buried alive, deep in a hole in the ground is precisely where the voters wish them to remain.
Obama is not alone in bringing on this calamity but he’s certainly done more than his fair share to bring the economy to critical mass. Our only hope is to grow our way to solvency. Sadly, we’ll never be able to achieve the necessary rate of growth thanks to the the increased baseline spending, enormous new entitlements, and onerous regulatory environment foisted upon the US economy by Obama. Given another term he would surely add confiscatory tax rates and a host of new entitlements to the mix.
Oh yeah, there’s that whole $100 trillion in unfunded Medicare and Social Security liability thing too. You know, the one Obama uses to demagogue Republicans as forcing seniors to eat puppies and sell orphans to pay for health care at every campaign stop.
Duck and cover indeed.