August 27, 2010
Our massive debt has produced an unease that America may be at greater risk from economic collapse than from terrorists. Excessive debt is terror by other means, says columnist Cal Thomas.
Brian Riedl, the Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation, has performed a useful service by analyzing the 10-year budget baseline of the Congressional Budget Office (CBO), which puts the deficit at $6.2 trillion. Riedl says that's a phony figure because the CBO is forced to make assumptions based on what Congress tells it. The true baseline deficit, says Riedl -- based on a continuation of current spending and tax policies -- amounts to $13 trillion over the next decade.
Here are Riedl's conclusions:
- Even as war spending phases out and the economy recovers, the projected budget deficit never drops below $1 trillion, and reaches nearly $2 trillion by 2020.
- The national debt held by the public is set to surpass 100 percent of the gross domestic product (GDP) by 2020.
- By 2020, half of all income tax revenues will go toward paying interest on a $23 trillion national debt.
- Federal spending per household, which has risen from $25,000 to nearly $30,000 over the past three years, would top $38,000 by 2020; the national debt per household, which was $52,000 before the recession, would approach $150,000 by 2020 (all adjusted for inflation).
- Even if all tax cuts are extended, revenues will still surpass the 18 percent of GDP historical average by 2020.
These spending and deficit trends are completely unsustainable, says Riedl. Yet President Obama and Congress continue to push spending and budget deficits even higher with endless failed "stimulus" spending that is now expected to continue into the middle of this decade. They have also enacted a massive new health care law that -- far from reining in spiraling health care costs -- increases spending (and likely deficits) even further. In short, Washington is digging this budget hole deeper.
Source: Cal Thomas, "Lower Expectations," Jewish World Review, August 24, 2010.
For Riedl text:
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