Happy days are here again
The country has lost its marbles, according to Michael Barone. Don’t worry. Be happy:
In the fiscal year just ended, federal spending was nearly 25 percent of GDP, while federal revenues slipped below 15 percent because of the financial crisis and recession. We have not seen a budget deficit of this magnitude since World War II, which surely was a greater challenge than recent economic troubles.
Apologists for the Obama administration argue that some 2009 spending, like that on financial bailouts, is nonrecurring. True, but as the Congressional Budget Office has reported, the trajectory of administration spending and revenue is pushing the annual deficit toward $1,000,000,000,000 — that’s $1 trillion — for the next decade.
Congressional Democrats’ health care bills threaten to add to that. The bill currently before the Senate is advertised as costing less than $1 trillion. But significant spending doesn’t kick in till 2014 and over the ensuing 10 years adds up to $1.8 trillion, nearly double that.
Thanks to current low interest rates, servicing the debt costs the government only $200 million this year. But the White House estimates that debt service will exceed $700 billion in 2019. “In a few years,” editorializes the Economist, “the AAA rating of Treasury bonds, the world’s most important security, could be in jeopardy.”
It’s not only Republicans who decry this prospect. Examining the Democrats’ health care proposals, William Galston, domestic policy adviser in the Clinton White House, writes, “We’re already facing an unsustainable fiscal future.”
Looking farther ahead, Scott Winship notes in the Progressive Policy Institute’s progressivefix.com blog that federal spending is on course to exceed 40 percent of GDP because of scheduled spending on entitlements — Social Security, Medicare, Medicaid — within the lifetime of today’s children.
Yet the congressional Democrats who are pressing to expand federal health care spending do not seem much fazed by the prospect that, as Winship writes, “the level of taxation it would require to meet projected spending needs is far higher than anything the country has ever seen-slash-tolerated.”
No problem. Just use the credit card. We think it is a near certainty that future generations of Americans will hold those at the helm today in utter contempt for squandering their birthright.