More bad news has been released last Tuesday concerning government entitlements and their survival.
The study shows that federal healthcare and retirement programs threaten to overwhelm the federal budget and harm the economy in coming decades unless Washington finds the political will to restrain their uncontrollable growth.
The study also found that if this trend is not halted, long-term spending threaten the moderate improvements recently seen in the overall deficit.
The Congressional Budget Office reports government spending on healthcare and Social Security will become twice the size of the nation’s economy I the next 25 years with spending for defense, transportation and education will decline to minimal levels not seen since the Great Depression.
Yet it’s apparent, with such votes in Congress such as reduction of the Food Stamp Program, which has doubled since 2010 that liberals and many Democrats refuse to face the reality of this dire situation. It appears votes are more important than the nation’s future.
Federal spending on healthcare alone was predicted to rise 4.6 percent of gross domestic product today to 8 percent in 2038. Government spending on Social Security would rise with the number of people receiving benefits to over 100 million in 25 years.
That is compared with 57 million people taking benefits in 2013.
The unsustainable costs rise in costs have been well-known to the nation’s lawmakers for years.
Conservatives and most Republicans say it is best to handle this grave situation now, but the rift between the two parties and the push to add new voters by the liberals has left the problem stagnant year after year as they portray themselves as the “compassionate” party.
The Democrats want a variety of tax increases with minimal reductions in costs for Medicare, Social Security and other spending programs. Meanwhile, the Republicans year after year propose prolonged cutbacks and future taxes which include President Barack Obama’s politically-charged rate increases on upper-bracket earners in January.
Democrats are betting that political rhetoric and perception of the “mean GOP” is the way to their political future on the backs of future generations of Americans who will pay the price of this tactic.
The CBO said, "The unsustainable nature of the federal government's current tax and spending policies presents lawmakers and the public with difficult choices. To put the federal budget on a sustainable path for the long term, lawmakers would have to make significant changes to tax and spending policies."
There is no question that President Obama inherited the worst recession since the Depression, largely responsible for the new deficits above $1 trillion. That is justifiable with many economists – for his first term.
But most economists think the explosion of retirees from the baby boom generation will cause the national debt to rise bringing the debt to 108 percent of GDP by 2038, with 8 percentage points of that figure caused by the economic drag the debt would have on the economy.
Yet in Washington it seems like it’s business as usual, which means partisan politics.
The latest CBO report comes as a severely divided Congress and Obama must face two incredibly vital problems:
The first is keeping the government funded beyond the October 1 at the onset of the 2014 budget year while allowing government to borrow even more money to pay those bills. Secondly, the Republican strategy must be to instill a “must-pass stopgap spending and debt limit legislation” to either delay of eliminate Obamacare, forcing huge spending cuts.
The battle of the politicians is on and there can only be hope that they will think about the welfare of the nation over their next re-election campaign.
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