Free Markets, Free People

CBO budget forecast? Debt, debt and more debt

CBO has extrapolated the budget for the government out to 2039 and using current law paint a picture of the same old crap with a continuing rise in public debt:

Note that the spending an revenue lines are essentially as close as they’re going to get this year, with spending outpacing revenue and widening the gap from now on.

Oh, and this little goodie:

  • Federal spending for Social Security and the government’s major health care programs—Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies for health insurance purchased through the exchanges created under the Affordable Care Act—would rise sharply, to a total of 14 percent of GDP by 2039, twice the 7 percent average seen over the past 40 years. That boost in spending is expected to occur because of the aging of the population, growth in per capita spending on health care, and an expansion of federal health care programs.

So much for “and we’ll save every family $2,500 a year on their health care insurance”.   Costs aren’t going anywhere but up.  Of course, you can count on the propagandists to now claim they’ll be going up slower than had they let the market work.  As with most of the “facts” these yahoos throw around, it will be a baseless claim meant to excuse their failure.

And as the debt piles up even more, so does the amount of money it takes to pay the interest:

  • The government’s net interest payments would grow to 4½ percent of GDP by 2039, compared with an average of 2 percent over the past four decades. Net interest payments would be larger than that average mainly because federal debt would be much larger.

No kidding.  Which means:

  • In contrast, total spending on everything other than Social Security, the major health care programs, and net interest payments would decline to 7 percent of GDP by 2039—well below the 11 percent average of the past 40 years and a smaller share of the economy than at any time since the late 1930s.

Can anyone yet guess the solution to this problem?  That’s right, is some form or another, a tax increase.  One of the reasons a carbon tax is so popular among some politicians is it taxes thin air and creates a revenue stream out of it.

This is the continuing situation the incompetents who run this government (and yes that includes both parties) have managed to produce for this once proud nation.  A debtor nation which is slowly dying under the weight of its own debt, brought to us by spendthrift politicians who will all deny they’re the problem.

But that single picture tells a different story doesn’t it?

Here’s our future:

  • The large amount of federal borrowing would draw money away from private investment in productive capital in the long term, because the portion of people’s savings used to buy government securities would not be available to finance private investment. The result would be a smaller stock of capital and lower output and income than would otherwise be the case, all else being equal. (Despite those reductions, the continued growth of productivity would make output and income per person, adjusted for inflation, higher in the future than they are now.)
  • Federal spending on interest payments would rise, thus requiring higher taxes, lower spending for benefits and services, or both to achieve any chosen targets for budget deficits and debt.
  • The large amount of debt would restrict policymakers’ ability to use tax and spending policies to respond to unexpected challenges, such as economic downturns or financial crises. As a result, those challenges would tend to have larger negative effects on the economy and on people’s well-being than they would otherwise. The large amount of debt could also compromise national security by constraining defense spending in times of international crisis or by limiting the country’s ability to prepare for such a crisis.



Tweet about this on TwitterShare on FacebookShare on Google+Share on TumblrShare on StumbleUponShare on RedditPin on PinterestEmail this to someone

37 Responses to CBO budget forecast? Debt, debt and more debt

  • And…
    we’ve known this for decades.  DECADES!  Pres. ScamWOW even promised he was going to address this…and not in the bad way he has.
    But it will take a massive act of political will to make the changes we have to make.  As I’ve said before, we either change rationally or we change catastrophically.  I recommend the former.

  • It’s summer and I’ve been rather avoiding politics, but clearly in our two party divided government system the only solution is a mix of spending cuts and tax increases.  Let’s do like Germany (world cup winners!) did and pass a balanced budget amendment – based on recognition that left and right each have a say and along with cuts there are tax increases.  No jihadist “only the other side must give way” mentality, but pragmatic problem solving.  Alas, ideological thinking – which the 20th Century proved to be disastrous – still affects too many on the left and the right.  Ideologies are inherently simplistic, as they create a simplified interpretive framework for a very complex reality.  So, yeah – make cuts to entitlements, cut spending, do things liberals fight against.  But also increase taxes and revenues, do things conservatives fight against.  The great Compromise of the 80s was that the Democrats agreed to lower taxes in exchange for Republican agreement to increase spending.  Now both sides have to do the reverse – less spending, more taxes.  There is no other way out of this – neither side can get their way in a system designed as ours is.  They have to compromise – or weaken the Republic by holding out with a jihadist mentality.

    • I suppose the “jihadist mentality” was intended as your idea of “biting polemics”.
      It just sucks.
      It isn’t “ideological” to note there aren’t enough tax increases possible to provide more than a palliative to our debt bomb, people will not stand still for them (they will leave), and that kind of taxation would have (additional) crippling effects on our economy.
      Ask France, ya moron.

      • You can’t balance the budget with tax increases or spending cuts alone, there has to be both.   Germany (World Cup champs!) is an example of pragmatic politics at its best.   Yes, there are ideological differences, but the two sides recognize problems and come together to form compromise solutions – no one is 100% happy, but it has allowed them to pass a balanced budget amendment, keep their economy purring, deal with the Euro crisis in a way most Americans didn’t think possible, and be one of the world’s most successful economies.  Pragmatism works, politics as blood sport leads to national decline.

        • I understand you are stupid enough to think you if say bullshit repeatedly, that will mean something or constitute an argument.
          Sorry.  It is just stupid banality reiterated.  Which is not really evidence you have a brain in your head.
          And everything I said stands untouched by refutation.

        • Estonia just did cuts. It worked. So much for European examples.

          • Cuts alone won’t work here, nor would tax increases alone.  Politically it can’t happen.  Germany like the US is a very advanced economy.  Estonia is recovering from Communism – a very different example.

          • You poor, stupid thing.  You can’t even read a chart.  There is no tax increase that could resolve our debt problem.  None.
            We can grow our economy, thereby increasing revenues, or we can continue with the fascist Obamic Decline.  Massive revisions in our spending are simply required, because they will happen catastrophically if we don’t take them on rationally.  Things that cannot continue won’t.

        • Twice –
          World Cup Champs – winning seems to suddenly be important.   Being #1 is suddenly important?.
          After all, no one is really any better than anyone else, right?    Just different.
          Or something.

          • I hear the übermensch are very pragmatic, so long as everyone obeyz ze pragmatic orderz zen ve vill nut feel compelled to invade you! Somehow the image of Erb in drag at a Berlin cabaret in the mid 1930s sporting a long cigarette holder and admiring the long trenchcoats is just so evocative.

          • goose schtupping his way across the stage.
            Oh, wait, that’s not translated as goose stepping is it.

          • OK, BOTH of you just STOP THAT…!!!
            I have to go to Sams and get that industrial drum of mind bleach now, thank you SO much…!!!

        • Erb is back on the happy pills and all bipartisany. This can only mean…

          1. He is back to getting some at home.
          2. Obama is in trouble somehow.

          • Actually the GOP is in fantasy land trying to manufacture faux scandals to avoid dealing with reality.

          • Actually, the American people don’t consider the MANY Obamic scandals “faux” at all.  They support the investigation of them.
            Only Collectivist bung-suckers of the lowest order even pretend that bullshit any more.
            And you attempt at pimping your blog won’t work, ya moron.

          • Yeah, but Scotty is like Obama so you stick with the message you want to talk about.   Faux scandals, caused by racism and fear of the new millennium!
            Mysteriously crashed hard drives of multiple investigatees across multiple agencies, failure to notify Congress (or the DOJ…) about facts relevant to an investigation,  etc, these are all things manufactured by CONGRESS you see.   That’s his message, that it’s all manufactured scandal.
            For the rest of us his hero the pragmatic pro golfer continues to demonstrate there’s a village missing an idiot.
            But not for little Scotty.
            Obama will save us, he’ll be pragmatic, he’ll get the budget fixed, he’ll rein in spending, he’ll make the world safer and be a brilliant world leader.   He’ll save the Middle East, he’ll reset our adversarial relations with Russia.
            It’s obvious Scott the asshat’s clock stopped about 4 weeks after Obama’s inauguration.   Every thing that’s happened in the real world hasn’t happened in Scott’s world.
            My personal opinion is Obama doesn’t deal with this stuff because he keeps desperately hoping an adult is going to show up and deal with it for him.

    • And the great Compromise of the 90s was that Republicans agreed to raise taxes and the Democrats agreed to cut spending. You remember that, right? George H.W. Bush surely does. And I’m sure you remember the old saw “Fool me once, shame on you, fool me twice shame on me”.

      • And the great Compromise of the 90s

        And Ford in the 70s, Reagan in the 80s, and Bush in the 00s…

      Thought of any kind respecting Josie Antonia Vargas could be very, very dangerous for the Collective.
      I mean, does he have to pay taxes of ANY kind? If so, why?
      “Your laws are illegal”.  Oak Kay, then…


      Sure.  And why the hell not…???

      Monroe Doctrine…???  Yeh, that used to be a thing.
      Right, Erp…???

    • It’s summer and I’ve been rather avoiding politics. Partially because I was in Italy with students, and it’s completely accidental that 80% of them were nubile females, and I totally don’t go do that field trip to feed my fantasies about them. So don’t start about how my favorite book is Lolita. It’s not. Stop laughing.

      And I certainly have not been avoiding coming here because everything Obama had done recently is turning to moose feces. Nope, because it’s not. He thinks like me, and has all the right answers, and thank goodness all those scandals are just fake, ginned-up creations of the partisan GOP. Who are able to somehow get a whole bunch of hard drives to fail just to make it look like there’s a scandal. I don’t know how they did that, but you grunt engineer types were probably involved. You probabaly did some kind of quantum mean-thought influence over the Internet.

      Anyway, clearly in our two party divided government system the only solution is a mix of spending cuts and tax increases. Of course, the tax increases have to come first, just like the tax cuts did in the 1980s. See, back in the 1980s, the Democrats agreed to tax decreases and the GOP agreed to spending increases. Which isn’t either revisionist bullshit because the Democrats actually agreed to decrease spending and later reneged on that. Stop with those negative quantum thought waves. My godlike power of political science gives me the right to handwave that assertion aside. I was there, you know, not just fetching coffee for more important people. Nope, I was writing fierce memos and attending critical meetings, and we all decided that the GOP got lower taxes and the Democrats got higher spending. Spending cuts to compensate for the decreased taxes were never, ever mentioned. I decree it. Stop laughing.

      Let’s do like Germany (world cup winners, and don’t we all take our political positions from sport winners after all!) did and pass a balanced budget amendment. Which is totally going to work, and don’t you dare start with that exponential curve stuff you grunt engineer types love to talk about. Since the Germans did it, we should! Simple! How can you even think of arguing the case any further?!? The Germans are just brilliant, and I love to talk about them since I wrote a book about their foreign policy genius. Which wasn’t either for a vanity press that suckers social science academics, and you really should stop saying that.

      And don’t bring up how I’ve been talking about writing another book for years and haven’t shown squat progress. It’s coming along. It started out as a “Dense righties in the mist” sort of anthropological blog study, but then it evolved into a psychological analysis of those extremely extreme Tea Party extremists. It ought to be good enough to sucker persuade my dean to give me another sabbatical soon. Which I absolutely will not spend in a coffee shop leering at the big-breasted young barista there. I’ll be writing, and it will be a big hit. You’ll see.

      We surely don’t need that jihadist “only the other side must give way” mentality. Which you sterile, inbred righties exhibit all the time. And it’s not either an over-the-top insult to call you that, and it doesn’t either mean I’m just a leftist agitator. Because I’m not. I’m calling the extreme leftists jihadist too, kind of, though I would of course never ever pick any out by name, and I’m certainly not doing this on left-leaning blogs. They would ban me faster than a moose would eat a carrot.

      Nope, we need pragmatic problem solving. Which means we give government all the money it needs to do all the wonderful things it does, via tax increases. And then we throw a few scraps to you jihadist righties with illusory targeted spending cuts in a few non-essential places. And the fact that spending, debt, and size of government will all still keep going up faster than Germany scores goals against Brazil is beside the point. That’s just part of being pragmatic – that we pragmatically keep on increasing government. If you think otherwise, that’s jihadist thinking. I decree it.

      Alas, ideological thinking – which the 20th Century proved to be disastrous, so you guys need to stop it right now – still affects too many on the left and the right. Not me, of course. I’m totally non-ideological. Stop laughing! I don’t either just dance around issues and eventually come down on the leftist side when I say anything definite! I don’t, I don’t, I don’t. You are a jihadist if you say that.

      Ideologies are inherently simplistic, as they create a simplified interpretive framework for a very complex reality. Unlike me, who looks at reality in a spiritual, quantum physicy way that’s rich and complex and totally not just bent to satisfy my own needs to justify my own self-worth by lecturing you simplistic, jihadist righties. Because I don’t do that, and I’m not either just a mediocre thinker who has retreated to a moose college in East Wherever Maine, and who is so emotionally barren that I can’t even keep a Russian bride happy. Stop saying that.

      So, yeah – make cuts to entitlements, cut spending, do things liberals fight against. Only symbolic, of course, and naturally we complex quantum thinkers will respond by telling you how cold and cruel you are to push grandma down the stairs. But that’s just the way it has to be, because if we cut too much, it would be bad for people who depend on government. Like college professors who could never in a million years get a decent job outside academia would have limited opportunities if government didn’t pay us to indoctrinate introduce your kids to the wonder and glory of big government leftism.

      But also increase taxes and revenues, do things conservatives fight against. That’s the most important part. So let’s do that first. Right away, so that Obama can take credit for it help everyone come together in this common-sense solution.

      Now, how we ever get both sides to do that is just a trivial detail I don’t want to discuss. And it’s not either a rock-solid obstacle that makes my entire blathering about it sound naïve, childish, and clueless. Stop saying that.

      The great Compromise of the 80s was that the Democrats agreed to lower taxes in exchange for Republican agreement to increase spending. I decree it, as I said above. And it’s not either historical revisionism to support my “everybody sit down and work it out” Pollyanna demeanor, which makes me feel morally superior to you jihadists. Stop saying that, too.

      Now both sides have to do the reverse – less spending, more taxes. There is no other way out of this. I decree it. And don’t even bring up the point that doing the exact reverse of what was done in the 1980s means something is weird about this whole chain. of reasoning. It isn’t. Because what we’re really talking about is more taxes, more taxes, more taxes, and we’ll really, really try to do less spending, as long as no political science professors lose their jobs, and those poor children flooding the border get food, housing, healthcare, and education up through college.

      Neither side can get their way in a system designed as ours is. So don’t even bring up the fact that the left has gotten their way by continuously increasing government for decades. Everyone has to compromise – or weaken the Republic by holding out with a jihadist mentality. Hear me, we have to compromise! And of course, we brilliant post-modern leftist moderates get to define what it means for something to be a compromise. Which will be that increasing taxes is definitely done, until your ears bleed, and we’ll probably get around to decreasing spending a little bit in a few areas. Maybe. And the fact that overall spending keeps going up doesn’t mean it was all just a sham compromise to get you righties to go along with it. Stop saying that. Otherwise, you’re just a jihadist. I decree it.

      • This reminds me that Germans (world cup winners!) have a word for taking delight in seeing a loser like Erb being utterly humiliated…

      • Funny how we didn’t emulate the Germans in 2008-2009 when they refused to do any stimulus saying it didn’t work.

        • They hadn’t won the world cup then… apparently that is quite an important macroeconomic planning factor. Back then we should have been following the advice of Italy on matters economic.

    • mix of spending cuts and tax increases.

      And how many times have “we” fallen for that? For a perfesser, you sure are gullible.
      And if you knew an iota of economics, you’d know that tax RATE decreases provide more REVENUE. But it’s easier to shove your head up your own or some statist asskissers rectum than to try to assimilate more than two pieces of real data.

      • Sharps, Erp is deeply confused, and we really should not pick on him.
        For instance, he posts nonsense about “balanced budgets” when the McQ post was about our debt bomb.  A happy, happy balanced budget would be a wonderful thing, but you could have one from now to over the horizon and it would do not one whit to the massive debt we have already amassed and which is dialed in unless we make radical changes.
        Alluding to the Laffer Curve and the intuitive notion that tax rate increases past a certain point result in LESS revenue just gives Erp a headache, because the moonbattery has decreed the entire ambit “nonsense”.
        And, of course you can balance a budget with just revenue increases (from whatever source) or spending cuts.  What Erp cannot comprehend is that you COULD increase revenue without raising taxes by LETTING the economy grow, which (naturally) would mean taking the BIG GOVERNMENT boot off our necks.  Again, the very thought just gives Erp a headache and makes him want to find a place to lay down.

        • Just silly talk, the idea of a government NOT interfering in the market.

        • The last time anyone left Erp in charge of a business he stole the merchandise. Is that not the perfect metaphor for his political economic views as well?

          (Aside: The Laffer curve applied to Pizza joints… The less you steal the more there is for customers and the more profit you generate since you don’t recover the shrinkage from honest customers).

          • That was different, he was Pizza Hood, setter of straightness and revenge on evil unwashed overweight slobbish business owners.
            Thievery is okay when practiced against the correct members of society.
            He’s taken that to heart with his ready acquiescence to wealth redistribution plans.

          • See?  There are benefits to keeping the Erps among us out of the world of business.
            What a wonderful demonstration of the Peter Principle.

  • What, isn’t that why we need to import 15 million poor people from Central/South America and Asia, and probably a few from the land of the endless religion of peace?
    Isn’t that why we need to continue to import cheap allegedly highly trained workers in favor of hiring highly trained Americans?
    Isn’t that why we’re handing out free health insurance to all?   Isn’t that why we’re erasing our borders?
    Isn’t all this being done to save the economy, reduce the debt, guarantee a future for the childrens?
    Heh, hard lessons coming.   Let them rush it.  The sooner we get on with it the better, that way there will still be some left who remember better times and sensible ways.

  • Sen Harry Reid is bound to become the next “Kevin Bacon ‘All is Well’ award winner.”

  • Meanwhile Obama’s world tranquility just reached up and swatted a Malaysian passenger liner out of the sky over Ukraine with a SAM.