The Congressional Budget Office, a research outfit that justifies government spending, is warning that while deficit may appear tame now-- comparatively speaking-- the budget path we are on is unsustainable.
“The extended baseline projections show a substantial imbalance in the federal budget over the long term,” says the new CBO report, “with revenues falling well short of spending. As a result, budget deficits are projected to rise steadily and, by 2039, to push federal debt held by the public up to a percentage of GDP seen only once before in U.S. history (just after World War II). The harm that such growing debt would cause to the economy is not factored into CBO’s detailed long-term projections but is considered in further analysis presented in this report.”
See, the CBO isn’t charged with considering how bad this will get, but is still willing to take a stab at how future and current spending will negatively impact the economy.
Where were these guys during sequester, or the Cruz shutdown?
All we heard back then was how the lack of government spending was killing the economy. That’s kind of like blaming a hospital doctor for the death of a patient when Kevorkian has just left the room.
At least the CBO is willing to admit it.
They are equally blunt about the reasons why, although perhaps not as pessimistic as the case may warrant.
The CBO cites an aging population and rising government subsidies for healthcare as reasons why the deficit will balloon to unprecedented levels. Remember when saving money was the reason for Obamacare? Yeah I don’t really either, but I remember when they said it was.
“It will cut the deficit!” they said. Where’s your Ezra Klein now Obama?
“Moreover, CBO expects interest rates to rebound in coming years from their current unusually low levels, raising the government’s interest payments,” the government budget service continues. “That additional spending would contribute to larger budget deficits—equaling close to 4 percent of GDP—toward the end of the 10-year period spanned by the baseline, CBO anticipates. Altogether, deficits during that 2015–2024 period would total about $7.6 trillion.”
Previously the CBO projected interest rates at 5%, which historically is about right. At $25 trillion, the debt service at 5% could be $1.25 trillion. Military defense spending, not including veterans, is a bit north of $600 billion today. That is interest on the debt in ten years will be twice as large as defense spending is today.
And here’s the most devilish part: If interests rates stay lower, it means the economy is still in trouble posting sub-par GDP growth which is bad for everyone, especially liberals who need the economy to grow to keep up all the happy crap they want to do to bribe you. If interest rates go up—and they could go higher than 5%-- forget about social programs, welfare, social security, roads and bridges; there just won’t be money for that kind of stuff.
Already the CBO, the Joint Committee on Taxation, and other government stink tanks are preparing the case that TAXES must be raised to address the structural imbalance of a system that promises too much, delivers too little and costs full retail price—unionized retail price, with a high minimum wage added on.
But don’t count on this to end well for those who dreamed of the socialist utopia promised by Obama, Elizabeth "DC Redskin" Warren and Whoopi Goldberg. To gain the appearance of progress, they bought now-- like they always do-- but they will pay for it later—like they always do.
They will pay for their purchase of Obama; they will pay for their purchase of Obamacare; and they will pay for the franchise fee they get from the unions... later.
We’ll pay too.
But just remember, America, who ordered what when it comes time for the check.
Because they always buy and you always pay.
That’s the Democrat way.