As government debt spirals out of control, the sky is the limit when it comes to future taxes owed.
(Page 2 of 2)
And the future looks bleak. In its analysis of the president’s budget, released in March, the Congressional Budget Office figured that the deficit for this year would be slightly less than the administration projected, but the collective red ink from 2011 and 2020 would be $1.2 trillion greater, for a total of $9.8 trillion. The agency warned that deficits for 2010 and 2011 “would amount to 10.3 percent and 8.9 percent of gross domestic product (GDP), respectively. By comparison, the deficit in 2009 totaled 9.9 percent of GDP.”
Then there would be a short drop, but only short drop. Explained CBO: “the deficit under the President’s proposals would fall to about 4 percent of GDP by 2014 but would rise steadily thereafter.” The federal debt obviously would rise too. As a result, “Net interest would more than quadruple between 2010 and 2020 in nominal dollars (without an adjustment for inflation); it would swell from 1.4 percent of GDP in 2010 to 4.1 percent in 2020.”
These estimates don’t include any of the inevitable but unbudgeted future spending increases. The FDIC has been closing a record number of banks. The Pension Benefit Guaranty Corporation’s fund is running in the red. Fannie Mae and Freddie Mac continue to lose money — and the financial hemorrhage will reach flood stage if the commercial real estate market tanks, as is widely expected. Most federal health care “reform” outlays don’t kick in until mid-decade.
Then there are Social Security and Medicare, which together have $107 trillion in unfunded liabilities. Contra expectations, Social Security began running a deficit this year. And there’s no money in the fraudulent “trust fund” to pay for future benefits.
Looking just at the time frame just through 2020, CBO warns: “To keep annual deficits and total federal debt from reaching levels that would substantially harm the economy, lawmakers would have to increase revenues significantly as a percentage of GDP, decrease projected spending sharply, or enact some combination of the two.”
Of course, we all know the likelihood of politicians suddenly becoming responsible fiscal stewards. America is starting to look like a bigger version of Greece, only a few years behind.
Even after you’ve finished paying your taxes this year, it’s too soon to celebrate. You really aren’t done. And you may never be done.
The president and Congress are attempting to run a welfare state on the cheap. Unfortunately, the bill eventually will come due. And when it does we may be lucky if Tax Freedom Day ever comes again.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online