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The Spectacle Blog
I keep trying to tell myself that everything will be okay. Then I read an article like this one by Ernest S. Christian and Gary A. Robbins in Investor's Business Daily:
President Obama has officially begun the era of bigger big government by proposing to go on a multitrillion dollar borrowing spree that risks doing to the "full faith and credit of the United States" what excessive borrowing during the housing bubble did to private credit.
Under his budget plan for America's future, spending will average 23.7% of GDP for at least a decade (a whopping 20% higher than in 2000-08).
Near-record deficits increasing at record rates will push the public debt of the U.S. beyond the economy's plausible capacity to pay - 70% of GDP by 2012, heading quickly to 82% of GDP in 2019 and on pace to be astronomically higher soon thereafter.
The Avalanche
American families over the last year have already lost 8% of their net worth - in part as a result of inept government meddling, past and present. For many of the same reasons, they are also buried under a mountain of mortgages and private-sector debts gone bad. On top of that, if the president has his way, they will soon be hit with more than a 100% increase in public debt (from $8 trillion this year to $17.3 trillion in 2019).
Furthermore, the Treasury (and taxpayers) will soon have to begin repaying to Social Security more than $5 trillion in payroll tax revenues that the government had taken from the trust fund and spent for earmarks and other purposes.
Even without the Obama surge in debt - and taxes to pay it off - taxpayers face the prospect of 60% to 70% income-tax rates in the future to pay for $48 trillion in unfunded liabilities under existing entitlement programs. Now the president plans to burden the economy's limited taxpaying capacity with a universal health care entitlement.
Well, as I've said before, it's only money. Don't worry, be happy!
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More Blog Posts by Doug Bandow
http://spectator.org/blog/2009/06/13/uncle-sams-debt-bomb
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Oldefarte| 6.13.09 @ 1:17PM
Excellent, Doug! The hike in income taxes,etc. is just around the corner, and is the only way possible for this administration to pay for their excessive spending/deficit financing. This [increased spending funded by increased taxes] is Obama's WEALTH TRANSFER political philosophy [as expressed to Joe the Plumber, pre-election], and when consumers/taxpayers finally realize the extent of his upcoming tax increases, they're going to be rioting in the streets over same!!!!
Roy| 6.13.09 @ 1:59PM
Or the government could just print more money.
A trillion here and a trillion there, pretty soon you're talking about fake money.
Mike| 6.13.09 @ 4:27PM
This is information every citizen should have concerning how our country ran up a $2 trillion debt. The extended quote is from an article by David Leonhardt. The full text can be found in the June 9th edition of the New York Times. Note the percentage of the total debt attributable to the stimulus package.
"The first category — the business cycle — accounts for 37 percent of the $2 trillion swing. It’s a reflection of the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists’ assumptions about how much in taxes the government would collect in future years.
About 33 percent of the swing stems from new legislation signed by Mr. Bush. That legislation, like his tax cuts and the Medicare prescription drug benefit, not only continue to cost the government but have also increased interest payments on the national debt.
Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.
About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.
If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits."
Pingback| 6.16.09 @ 10:31PM
Steynian 364 « Free Canuckistan! links to this page. Here’s an excerpt: