Free Markets, Free People

Obama’s budget would double public debt by 2021

If you thought President Obama was serious about his rhetorical appeals to fiscal responsibility, one only has to look at the latest CBO report to know better.  There is nothing in the report to support any such contention by the administration.  To the contrary it points to a level of fiscal irresponsibility that is unprecedented in the history of this republic.  Obama’s budget would, if executed, double the public debt by 2021 to $20.8 trillion or 87% of the GDP.  That is if our economic and financial systems, not to mention the dollar, last that long:

In 2012, the deficit under the President’s budget would decline to $1.2 trillion, or 7.4 percent of GDP, CBO estimates. That shortfall is $83 billion greater than the deficit that CBO projects for 2012 in its current baseline. Deficits in succeeding years under the President’s proposals would be smaller than the deficit in 2012, although they would still add significantly to federal debt. The deficit would shrink to 4.1 percent of GDP by 2015 but widen in later years, reaching 4.9 percent of GDP in 2021. In all, deficits would total $9.5 trillion between 2012 and 2021 under the President’s budget (or 4.8 percent of total GDP projected for that period)—$2.7 trillion more than the cumulative deficit in CBO’s baseline. Federal debt held by the public would double under the President’s budget, growing from $10.4 trillion (69 percent of GDP) at the end of 2011 to $20.8 trillion (87 percent of GDP) at the end of 2021.

Given the outright deceit we’re regularly treated too by Democrats concerning their seriousness in addressing the problems we face, or their outright disinterest in  actually doing so (Harry Reid’s recent “see me in 20 years about Social Security” or his whining about defunding “cowboy poets”), it shouldn’t really surprise anyone that we’re in the shape we’re in or that this administration is actually offering these budgets on the one hand while claiming to understand that we can’t continue spending as we are on the other.

We even have Nancy Pelosi claiming Democrats have always been for fiscal responsibility.

It boggles the mind to even consider these numbers and yet we have an administration offering them as the way to go for the future and doing so with a straight face.  

Note the chart included here.  The “baseline projection” is what we’d spend under current law.  CBO claims one of the problems is a decrease in revenues under the President’s proposed policies with, you guessed it, an increase in outlays.  And we’d also see – and this isn’t unexpected at all, given the amount of money we continue to borrow – an increase in the percentage of outlays required to service the debt:

In particular, net interest payments would nearly quadruple in nominal dollars (without an adjustment for inflation) over the 2012–2021 period and would increase from 1.7 percent of GDP to 3.9 percent. Total outlays under the President’s budget would equal 23.6 percent of GDP in 2012, decline slightly as a share of GDP over the following two years, and then rise for the rest of the 10-year projection period. They would equal 24.2 percent of GDP in 2021—about 0.3 percentage points above CBO’s baseline projection for that year and well above the 40-year average for total outlays, 20.8 percent.

So if the President’s budgets were enacted, we’d see government outlays – that’s spending for the rest of us – hit almost a quarter of the GDP and the debt in total about 87% of GDP in 10 years.

Meanwhile Democrats continue to fight against almost every cut for the most inane reasons while we see the debt numbers continue to climb.  Republicans are at least are making an attempt at cutting spending, no matter how weak, but Democrats have given up all pretense.  And all credibility.  The President’s budgets are the final nail in the Dem’s faux “fiscal responsibility” coffin.

~McQ

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9 Responses to Obama’s budget would double public debt by 2021

  • Something kinda funny about the graph…

    As a percentage of GDP, the debt peaked and then started to decline when Slick Willie was in office.  Oddly enough, it only increased slightly when Bush was in office, jumping a bit in the last year or so of his term… then it takes off like a bloody rocket.

    I thought that Bush, with his illegal wars in Iraq and A-stan, was the cause of all our deficits and debt.

    Silly me.*

    McQThe President’s budgets are the final nail in the Dem’s faux “fiscal responsibility” coffin.

    Look, how many times have I got to explain it to you?  The Dear Golfer and the dems ARE being “fiscally responsible” by investing our money in important stuff like saving the economy, universal health care, education, shovel-ready infrastructure projects, green jobs, cowboy poetry, and Big Bird.  Only Republicans have crippling deficits and debt; democrats INVEST IN OUR FUTURE (for the children!(TM)).  Now do you see the difference???

    / sarc

    —–

    (*) – In fairness, this is debt as a % of GDP, not debt in dollars.  Bush ran deficits every year of his term, as I recall, but NOTHING like what The Dear Golfer is piling up.

  • Under the outstanding leadership of House Speaker Nancy Pelosi, a woman so “gifted” that budgets are passe.
    Maybe I’m missing something, but perhaps Nancy, like so many women who like to spend other people’s money, is saving use money.

  • I think these people get away with lying more aggressively than the GOP because of the MSM having their backs. I am more and more convinced that what we need are structural changes rather than just electoral changes. Like school vouchers killing the teachers unions and their power. Like defunding NPR. Like reforming academia…not sure how to do that though.

  • Obama’s budget would, if executed, double the public debt by 2021 to $20.8 trillion or 87% of the GDP.

    Okay, what am I missing? $20.8trillion as 87% of GDP would make GDP to be $23trillion.
    On what planet would that be?
    Correct me if I’m wrong, but right now our cash debt is $14trillion and our GDP (one-third of which is government spending) is also $14trillion – IOW, 100% of GDP.
    What am I missing?
     

  • <Addendum>
    Yes, I realize they’re talking…okay, BSing, about 2021, ten years from now.

  • From MarketWatch:

    The Treasury Department said Monday that it will begin to sell its portfolio of $142 billion in agency-guaranteed mortgage-backed securities. A senior Treasury official said the department plans to sell up to $10 billion in MBS per month subject to market conditions. The sales could generate a profit for taxpayers of about $15-$20 billion as market conditions have improved, the official said. Congress gave Treasury the power to purchase the securities guaranteed by Fannie Mae and Freddie Mac to provide stability to financial markets during the financial crisis of 2008. The official said the sales were not related to the looming debt ceiling.

    This must be part of a “buy high, sell low” strategy.

  • Just wanted to say that I work at a big Pharmaceutical corporation in Clayton NC and I endroce Barack Obama with all my heart. I would love for all my friends and colleagues to say yes for Obama in 2012!! I LOVE YOU OBAMA