An medical emergency exists in Washington. Republicans in the House of Representatives are in desperate need of donors for spine transplants. The invertebrate GOP has once again demonstrated its penchant for surrender by waving the white flag on the nation's Leviathan debt problem.
As the United States debt bumped up against the ceiling, Republicans cast their lot with Harry Reid and Senate Democrats by voting to raise the cap without a whimper. In doing so, the GOP-controlled House cowed to media pressure and bowed to President Obama who refused to negotiate over the limit.
As a result, the government has once again failed to come to grips with the biggest threat to the nation's future. There is a deafening silence from both political parties on the tsunami of debt which eventually will swamp America's ability to meet its obligations and wipe out its financial security.
Despite the imminent crisis, Washington's political class remains callous to the calamity. It is time Americans started demanding action. Unless there are course corrections, the U.S. will remain on a path of self-destruction that will make bankrupt Greece appear to be financially prudent.
Since 1960, the nation's debt lid has been lifted 78 times. Yet there is never a hue and cry from the Beltway Big Spenders. Although as a senator, Barrack Obama berated his predecessor George W. Bush for requesting to boost the debt ceiling, describing the demand as "irresponsible and unpatriotic."
The president's tune has not only changed, but the entire score has been rewritten.
Since Barack Obama took up residence in the Oval Office, federal government debt has surged a staggering $6.666 trillion, according to figures from the Treasury Department. When Obama was first inaugurated in 2008, debt stood at $10.6 trillion. On January 31, indebtedness was about $17.1 trillion.
In less than six years into the Obama presidency, the United States has accumulated as much new debt as it did in the first 227 years of its history. Since September 20, 2012, the national debt has grown an average of $2.47 billion each and every day.
For some perspective, the federal debt in 1910 was $1 billion or about $12.40 per citizen. Today the debt load works out to $54,425 for every man, woman and child living in the United States. Even worse, the non-partisan Congressional Budget Office projects debt will continue to mushroom.
The CBO this month forecasted that public debt will reach a staggering $21 trillion by 2024, just 10 years from now. If the forecast is correct, that means that the interest on the national debt will triple from this year's level of $233 billion to a whooping $800 billion per year.
Unfortunately, the official debt number understates the nation's total indebtedness. On top of federal debt, state governments have racked up $5.1 trillion in debt, according to the non-partisan, nonprofit State Budget Solutions, a national public policy organization.
The states' combined debt is the equivalent of $16,178 for every citizen. Unfunded public pension liabilities represent a massive 79 percent of all state debt. California tops the list with $778 billion in unfunded financial commitments.
Unfunded pensions at the state level are only the tip of the debt iceberg. The federal government and by extension taxpayers are on the hook for trillions of dollars in unfunded liabilities for three programs: Social Security, Medicare and Medicare prescription drugs.
The Obama Administration tries to downplay the future obligations. Although it acknowledges the liabilities exist, the feds argue they can meet the future benefit payments by raising taxes, restructuring programs or by borrowing more money. In recent years, they have done all three.
There are legitimate disagreements over the value of the government's future obligations. Some calculate the number as high as $200 trillion, others peg it as "low" as $54.4 trillion. Fact checkers at The Washington Post claimed last October that the number was closer to $30 trillion.
Even using The Washington Post's deflated figure, that still adds up to more than $52 trillion in total indebtedness for the United States, excluding state debt. How high must that number go before Americans use the voting booth to reign in the incessant borrowing binge?
A day is looming when the nation will face some Draconian choices. Boston University economist Larry Kotlikoff studied the debt problem and estimated that income taxes would have to increase by 54.8 percent or federal spending reduced by 36.2 per cent to meet future obligations.
Those are sobering numbers that should shake every American from lethargy over the nation's debt. We owe it to our children and grandchildren to do something about it before they are stuck with a ghastly bill for our government's excesses.
Showing posts with label National Debt. Show all posts
Showing posts with label National Debt. Show all posts
Monday, February 17, 2014
Tuesday, October 15, 2013
A Debt Ceiling Primer
"America has a debt problem and a failure of leadership. America deserves better." Those two sentences frame the plight of a nation witnessing a vitriolic political tug-of-war in Washington over raising the debt ceiling.
The summary of the country's quandary was offered by then Senator Barrack Obama. He made the comments in March of 2006 before he voted against increasing the nation's debt ceiling. Obama turned thumbs down on another debt request in 2007, ignoring warnings of a financial apocalypse.
That's why it is ironic that President Obama has resorted to trashing Republicans who stand in the way of his attempt to hike the U.S. debt ceiling, which now teeters at $16.7 trillion. Those who oppose the president are labeled hostage takers, extortionists and extremists.
No one can remember any politician spewing such bilge about Senator Obama for his defiant stance on the debt ceiling less than seven years ago.
The current debt limit hysteria, fueled by the president and his slavish media, has drowned out all reasoned debate over the question of whether the nation will benefit by raising the limit on the government credit card.
This toxic atmosphere in Washington has contributed to obfuscation, deception and dishonesty that does nothing to promote a negotiated settlement. Here are some facts to put the battle over the debt limit in perspective:
1. President Obama has forewarned that default is likely if Congress fails to act on the debt ceiling. However, the tax receipts for the current year are expected to top $3 trillion, more than enough to cover the annual interest payment of $237 billion. The president and the Treasury secretary should have no problem figuring out how to avoid default on the debt. They alone will make the call on whether to default. As proof, read about what another president did in the next paragraph.
2. President Obama has chided legislators for contemplating something no other Congress has done. In 1953, Republican President Dwight Eisenhower's request for a modest lift in the debt ceiling was rebuffed by Senate Democrats, who argued the existing cap would impede runaway federal spending. In order to meet debt obligations, the president ordered drastic cuts in government expenditures. A full year after Eisenhower's request, the Congress finally approved an increase in the debt ceiling.
3. President Obama continually harps about Congress paying the bills for its spending. This borders on hypocrisy because the president has presided over the largest increase in the nation's debt in the history of the country. Since Obama assumed the Oval Office, debt has skyrocketed $4.939 trillion, a 51 percent increase since 2009. Gargantuan federal deficits run up under Obama have created the ticking debt bomb.
4. President Obama contends raising the debt ceiling will not add to the nation's borrowing. That is like a credit card holder asking for an increase in his or her borrowing limit while promising not to add more debt. Then why do it? Every time the debt ceiling has been raised by Obama, the nation has quickly bumped up against the cap. Deficits create the need for borrowing and Obama's federal budget sent to Congress last month projects the ballooning debt to stretch into another financial galaxy.
5. President Obama deserves the lion's share of the blame for the deficits. Obama has steadfastly rejected any Republican efforts to scale back entitlements which are growing at an alarming rate. Federal spending for major health care programs and Social Security are expected to increase at twice the average of the past 40 years, according to the Congressional Budget Office's recent report on the budget outlook. Increasing debt to cover the spending will result in "negative consequences for both the economy and the federal budget," the CBO cautioned.
A healthy debate over the debt ceiling is necessary for the country to come to terms with galloping federal spending that threatens the nation's future. Instead of stonewalling and haranguing, President Obama should lead the discussion.
By refusing to indulge in serious dialogue, Obama has abdicated his leadership role and polluted the environment for an agreement to end the crisis.
The summary of the country's quandary was offered by then Senator Barrack Obama. He made the comments in March of 2006 before he voted against increasing the nation's debt ceiling. Obama turned thumbs down on another debt request in 2007, ignoring warnings of a financial apocalypse.
That's why it is ironic that President Obama has resorted to trashing Republicans who stand in the way of his attempt to hike the U.S. debt ceiling, which now teeters at $16.7 trillion. Those who oppose the president are labeled hostage takers, extortionists and extremists.
No one can remember any politician spewing such bilge about Senator Obama for his defiant stance on the debt ceiling less than seven years ago.
The current debt limit hysteria, fueled by the president and his slavish media, has drowned out all reasoned debate over the question of whether the nation will benefit by raising the limit on the government credit card.
This toxic atmosphere in Washington has contributed to obfuscation, deception and dishonesty that does nothing to promote a negotiated settlement. Here are some facts to put the battle over the debt limit in perspective:
1. President Obama has forewarned that default is likely if Congress fails to act on the debt ceiling. However, the tax receipts for the current year are expected to top $3 trillion, more than enough to cover the annual interest payment of $237 billion. The president and the Treasury secretary should have no problem figuring out how to avoid default on the debt. They alone will make the call on whether to default. As proof, read about what another president did in the next paragraph.
2. President Obama has chided legislators for contemplating something no other Congress has done. In 1953, Republican President Dwight Eisenhower's request for a modest lift in the debt ceiling was rebuffed by Senate Democrats, who argued the existing cap would impede runaway federal spending. In order to meet debt obligations, the president ordered drastic cuts in government expenditures. A full year after Eisenhower's request, the Congress finally approved an increase in the debt ceiling.
3. President Obama continually harps about Congress paying the bills for its spending. This borders on hypocrisy because the president has presided over the largest increase in the nation's debt in the history of the country. Since Obama assumed the Oval Office, debt has skyrocketed $4.939 trillion, a 51 percent increase since 2009. Gargantuan federal deficits run up under Obama have created the ticking debt bomb.
4. President Obama contends raising the debt ceiling will not add to the nation's borrowing. That is like a credit card holder asking for an increase in his or her borrowing limit while promising not to add more debt. Then why do it? Every time the debt ceiling has been raised by Obama, the nation has quickly bumped up against the cap. Deficits create the need for borrowing and Obama's federal budget sent to Congress last month projects the ballooning debt to stretch into another financial galaxy.
5. President Obama deserves the lion's share of the blame for the deficits. Obama has steadfastly rejected any Republican efforts to scale back entitlements which are growing at an alarming rate. Federal spending for major health care programs and Social Security are expected to increase at twice the average of the past 40 years, according to the Congressional Budget Office's recent report on the budget outlook. Increasing debt to cover the spending will result in "negative consequences for both the economy and the federal budget," the CBO cautioned.
A healthy debate over the debt ceiling is necessary for the country to come to terms with galloping federal spending that threatens the nation's future. Instead of stonewalling and haranguing, President Obama should lead the discussion.
By refusing to indulge in serious dialogue, Obama has abdicated his leadership role and polluted the environment for an agreement to end the crisis.
Subscribe to:
Posts (Atom)