Morning Bell: A Sobering Wake Up Call

[Fieldmouse]

http://blog.heritage.org/2009/08/26/...-wake-up-call/



Morning Bell: A Sobering Wake Up Call

• Posted August 26th, 2009 at 9.16am in Entitlements.

Defending mounting job losses despite his administration’s $787 billion stimulus package, Vice President Joe Biden told ABC News George Stephanopoulos last month: “The truth is, we and everyone else misread the economy. The figures we worked off of in January were the consensus figures and most of the blue chip indexes out there.” This is just not true. Yesterday the White House released their Mid-Session Review admitting that President Barack Obama’s policies would force our nation to borrow more than $9 trillion over the next ten years.
Commenting on the gap between the new $9 trillion number and the $7 trillion number the Office of Management and Budget used to sell President Obama’s budget to Congress, the Washington Post reports:

The extra $1.9 trillion in red ink mainly reflects the Office of Management and Budget’s adoption of more realistic — that is, more pessimistic — estimates of economic growth and unemployment. White House officials protest that their original, rosier numbers made sense at the time; actually, plenty of forecasters, including those at the nonpartisan Congressional Budget Office, made more accurate calls. This situation was foreseeable and should have been acknowledged earlier.

While it is good that the Obama administration is finally admitting that the fundamental assumptions driving their economic policy were wrong, the reality of our current budget deficit, and what President Obama’s policies threaten to do to our national debt over the next decade, are truly sobering. Heritage senior policy analyst Brian Riedl details the carnage:

• Since World War II, the largest budget deficit recorded was 6.0 percent of GDP in 1983. The Bush Administration oversaw budget deficits averaging 2.0 percent of GDP. The projected 2009 budget deficit of 11.2 percent of GDP would nearly double the post-war record.
• The 2009 budget deficit will be larger than all budget deficits from 2002 through 2007 combined. More than 43 cents of every dollar Washington spends in 2009 will have been borrowed.
• While President Obama claims to have inherited the 2009 budget deficit, it is important to note that the estimated 2009 budget deficit has increased by $400 billion since his inauguration, and the whole point of the “stimulus” was to increase deficit spending to nearly $2 trillion based on the unproven notion that would it alleviate the recession.
• The 22 percent spending increase projected for 2009 represents the largest government expansion since the 1952 height of the Korean War (adjusted for inflation). Federal spending is up 57 percent since 2001.
• In 2009, Washington will spend $30,958 per household–the highest level in American history–and under President Obama’s budget, the figure will rise above $33,000 by 2019.
• The White House brags that it will cut the deficit in half by 2013. The President does not mention that the deficit has nearly quadrupled this year. Merely cutting it in half from that bloated level would still leave budget deficits twice as high as under President Bush.
• The public national debt–$5.8 trillion as of 2008–is projected to double by 2012 and nearly triple by 2019. Thus, America would accumulate more government debt under President Obama than under every President in American history from George Washington to George W. Bush combined.

And now for the real kicker: none of these numbers include the costs of Obamacare which would create another $1.5 trillion health care entitlement on top of our existing unsustainable entitlement obligations. The OMB’s Mid-Session Review should serve as a wake up call to the American people. President Obama’s policies are leading us down a path of unsustainable spending and borrowing.
There is another choice. Not all future spending is inevitable. In the 1980s and 1990s, Washington consistently spent $21,000 per household (adjusted for inflation). Simply returning to that level would balance the budget by 2012 without any tax hikes. Alternatively, returning to the $25,000 per household level (adjusted for inflation) that Washington spent before the current recession would likely balance the budget by 2019 without any tax hikes. So with very little sacrifice, and no new taxes, the government could get its budget under control and the American economy could get fully back on track in three years. Isn’t that worth considering?
Quick Hits:

• Sen. Ted Kennedy (D-MA) lost his battle with cancer yesterday, and Republicans joined Democrats mourning his passing.
• A wealthy New York investor and prominent Democratic Party fund-raiser with ties to President Obama and Hillary Rodham Clinton was indicted Tuesday on charges of bank fraud.
• The woman arrested by Denver police on suspicion of smashing 11 windows at Colorado Democratic Party headquarters appears to be the same woman who handles the books for many other Democratic-leaning political committees and was paid $500 by the leftist Colorado Citizens Coalition for “communications” in November 2008.
• According to the non-partisan Congressional Research Service: “Under H.R. 3200, a ‘Health Insurance Exchange’ would begin operation in 2013 and would offer private plans alongside a public option…H.R. 3200 does not contain any restrictions on noncitzens—whether legally or illegally present, or in the United States temporarily or permanently—participating in the Exchange.”
• Discussing health care with a Wisconsin crowd, Sen. Russ Feingold (D-WI) said: “Nobody is going to bring a bill before Christmas, and maybe not even then, if this ever happens. … We’re headed in the direction of doing absolutely nothing, and I think that’s unfortunate.”

[burniegoeasily]

Gawd, what will the final numbers be when the bill is due.

[Centauri]

Originally Posted by burniegoeasily

Gawd, what will the final numbers be when the bill is due.

I don't know, but I think we will have to default on our debt.

[C. Davis]

Well here is my plan, and I think it is our only hope. The problem is that we are doing the exact opposite.

Here it is:
Or only hope is to grow the economy. How do we do that.

1.
If we could get rid of the idea that to generate revenue (tax) to pay for services (mostly entitlements) we take what someone has earned and give it to someone who hasn't earned it, and cut corporate taxes to no more than 10%, Those companies who we constantly hear people complain about who have gone overseas would come back in droves, because they could not get that deal anywhere else.
That solves a big part of the jobs problem, and there would be much fewer excuses for those who cannot find work.

2.
Nobody should pay more than 10% of their income in taxes, and nobody should pay less than 10%. America should be the only place in the world people want to invest, and bank their money. The UBS in Switzerland is a tax haven. Why can't America be a tax haven?

3.
Instead of scrapping the best health care in the world, and starting all over, why don't we scrap OSHA, EPA, and every other federally regulatory agency and reform them.

Those are three easy steps that would change that deficit number. I bet it would change things faster than anybody could imagine. Government should do that, and get out of the way.

America must be the place in the world to do business, live, invest, and save money. That is our only hope.

Now you tell me. Are we even looking that direction?

C. Davis

[burniegoeasily]

Originally Posted by C. Davis

Well here is my plan, and I think it is our only hope. The problem is that we are doing the exact opposite.

Here it is:
Or only hope is to grow the economy. How do we do that.

1.
If we could get rid of the idea that to generate revenue (tax) to pay for services (mostly entitlements) we take what someone has earned and give it to someone who hasn't earned it, and cut corporate taxes to no more than 10%, Those companies who we constantly hear people complain about who have gone overseas would come back in droves, because they could not get that deal anywhere else.
That solves a big part of the jobs problem, and there would be much fewer excuses for those who cannot find work.

2.
Nobody should pay more than 10% of their income in taxes, and nobody should pay less than 10%. America should be the only place in the world people want to invest, and bank their money. The UBS in Switzerland is a tax haven. Why can't America be a tax haven?

3.
Instead of scrapping the best health care in the world, and starting all over, why don't we scrap OSHA, EPA, and every other federally regulatory agency and reform them.

Those are three easy steps that would change that deficit number. I bet it would change things faster than anybody could imagine. Government should do that, and get out of the way.

America must be the place in the world to do business, live, invest, and save money. That is our only hope.

Now you tell me. Are we even looking that direction?

C. Davis

That is just silly talk. Don't you know by now everyone else is just stupid, because the all knowing liberals have the one and only game plan. And if you do not agree, you are "brain dead". Thanks Peter Stark for your insightful analysis of your own party. Wait, he was bashing the good guys of his party.

[burniegoeasily]

Originally Posted by Centauri

I don't know, but I think we will have to default on our debt.

Very true, and do you think China will let us off the hook? Not a snowballs chance. I can see all of Rosevelts conservation land and state/national parks becomeing Disney world for China.

[Vizsla Vince]

Originally Posted by burniegoeasily

Gawd, what will the final numbers be when the bill is due.

Please, don't tell Obama what comes after a trillion! He'll want to spend that, too!

[Centauri]

Originally Posted by burniegoeasily

Very true, and do you think China will let us off the hook? Not a snowballs chance. I can see all of Rosevelts conservation land and state/national parks becomeing Disney world for China.

I'll be looking forward to practicing my shooting on the Chinese military from legal U.S. land.

Hey China, are you interested in a slightly used California? We don't need it anyways.

[kevin1]

Spending 8% of GDP for the military cost the Russians the collapse of their economy in roughly 40 years of Cold War, considering the acceleration curve of Obama's policies and spending he could collapse ours in far less.