Posted on 09/13/2014 10:22:29 AM PDT by Kaslin
Im very worried about the burden of government spending.
Moreover, Im quite concerned that poorly designed entitlement programs will lead to fiscal disaster.
And Im especially irked that Obama made the problem worse by ramming through yet another misguided and costly health care entitlement.
Given this background, you can imagine that I was very interested (and depressed) to see that Veronique de Rugy of the Mercatus Center put together some very important charts and analysis based on new fiscal policy projections.
After crunching the new numbers from CBO, heres her bottom line conclusion.
…data from the Congressional Budget Offices (CBO) recently released update to its Budget and Economic Outlook to show the trends and components of projected revenue and outlay increases. …growing entitlement obligations and net interest payments are projected to push outlays (spending) to grow faster than revenues over much of the next decade.
She also produced a chart showing the ever-rising burden of both taxes and spending. Pay close attention to how the numbers get worse at a rapid rate over the next 10 years.
There are two important takeaways from this data.
First, it should be abundantly clear that Washington is not suffering from inadequate tax revenue. Receipts are projected to rise in nominal dollars, in inflation-adjusted dollars, and as a share of GDP.
In other words, Americas long-run fiscal problems are solely a result of a rising burden of government spending.
Second, on the topic of government spending, its important to understand that the problem is overwhelmingly caused by entitlement programs. Social Security is part of the problem, but the real issue is government-run healthcare.
The President claimed Obamacare would bend the cost curve. But he wasnt truthful since the White House implied the legislation would bend the curve down rather than up.
Heres a second chart showing the breakdown of various spending categories.
As you can see, the problem is entitlements. And the healthcare entitlements deserve the lions share of the blame.
If this chart isnt sufficiently depressing, then keep in mind that the numbers get even worse after 2024.
Simply states, the United States is doomed to become another Greece in the absence of genuine entitlement reform.
But lets focus just on the next 10 years. Ms. de Rugy adds some detail.
…CBO projects three large budget categories—major health care programs (consisting of Medicare, Medicaid, the Childrens Health Insurance Program, and subsidies for health insurance), Social Security, and net interest payments on the debt—will account for 85 percent of the total increase in outlays from 2014 to 2024. Total outlays are projected to increase from roughly $3.5 trillion in 2014 to $5.8 trillion in 2024, for a total increase of $2.3 trillion. Major health care programs are projected to grow by $816 billion, which accounts for 32 percent of the total. Social Security spending will grow by $654.9 billion over the next decade, which constitutes 28 percent of the total increase in outlays.
Lets close, though, with some good news.
The numbers in the previous charts are all based on what happens if government policy is left on autopilot.
But what happens if politicians impose a modest bit of spending restraint?
According to the latest CBO forecast, inflation is supposed to average almost 2 percent over the next 10 years. So if some sort of spending cap is imposed and outlays only grow by a commensurate amount, it turns out that theres a remarkably quick change in Americas fiscal profile.
As seen in this chart, theres a budget surplus by 2019. And more important, government spending by 2024 is about $1.5 trillion lower than it would be with the budget left on autopilot.
Heres a video from a few years ago. The numbers are out of date, but the underlying analysis is still completely appropriate. Simply stated, its very easy to balance the budget if politicians simply follow the Golden Rule of spending restraint.
It's Simple to Balance The Budget Without Higher Taxes
P.S. Since this was a somewhat depressing topic, lets close with some humor.
A few years ago, I shared a satirical application form for bailout money from Uncle Sam. Well, the New Yorker has an application quiz for Syrian rebels seeking American dollars.
Just yesterday our local news outlets were breathlessly reporting that a number (I think it was 12) “health clinics” in the area are to receive millions of dollars thanks to the ACA to care for the “community”.
The hook is in. And I know that my money is going into this, and there is NO benefit to me.
Ha ha. Good one!
And these projections don’t include amnesty, which will, according to the Heritage Foundation, cost $6.3 trillion,
“In other words, Americas long-run fiscal problems are solely a result of a rising burden of government spending.”
In a nutshell.
Also bear in mind that since we are an AMAZINGLY wealthy country, filled with idiot sheeple, it’s going to take a very, very long time for the Socialists (both Dem & Pubbie) to run out of, ‘other people’s money.’
They can continue to do a helluvalotta damage between now and that day. Grrrrrrrr!
“But what happens if politicians impose a modest bit of spending restraint?”
Granted, it worked for Wisconsin, but there’s not a lot of will to do this, elsewhere.
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