A shocking number of ill-informed, politically-charged Democrats quoted the Congressional Budget Office's revised deficit figures as “their proof” the national debt is not as large of a threat as previously feared.
They need to take a closer look. Last May, the CBO said the federal deficit in fiscal 2013, which ends in September, will be “$642 billion, down from the $1 trillion-plus of the previous four years.” As President Obama said in an interview with ABC News, "We don't have an immediate crisis in terms of debt. In fact for the next 10 years it's going to be in a sustainable place."
He failed to mention that after years of bipartisan overspending, public debt today, that's the money that the federal government owes to domestic and foreign investors is nearly 90 percent higher than at the onset of the financial crisis in 2008. That is the calculation of Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University. "It climbed by $1 trillion between December 2011 and December 2012 alone to its current level of $12.03 trillion."
So how does the president come up with these numbers?
Public debt is now 75 percent of GDP, the highest level since 1950. That doesn't include debt the government owes to Social Security and other accounts, which is in the billions.
The CBO projects that the public debt will expand to $19 trillion by 2023, or 73.6 percent of projected GDP. That’s up from 36 percent as recently as the end of 2007. If Congress reverses the spending cuts forced through sequestration, the public debt will rise to 83 percent of GDP.
In other words, the politicians aren’t telling the American people the truth.
Here’s another frightening statistic: By 2023, the federal government is expected to spend $823 billion a year on interest payments, up from $223 billion today. Interest payments plus entitlement programs such as Social Security, Medicare, and Medicaid will account for 75 percent of the federal budget.
That increase will eliminate hundreds of other government programs just to feed the major entitlements.
Congress must act now to cut spending and reduce future entitlement obligations. No level of taxes can address the phenomenal fiscal imbalance that our country is facing now and into the future.
Fiscal Armageddon is closer than most people realize.
* If you have enjoyed this column, may I suggest you scroll down this page and press the SUBSCRIBE box? It's FREE. Thank you for your patronage.
** Send your comments to: email@example.com