Posted by
Billy on Friday, November 27, 2009 3:53:34 PM
Double-digit. That hyphenated adjective has been used most often recently to
describe October's 10.2 percent unemployment rate. But it can also be used to
describe the federal budget deficit as a percentage of the gross domestic
product. That precise number is not yet known, but it may turn out to have a
more dire effect on our national life than October's unemployment rate.
In the fiscal year just ended, federal spending was nearly 25 percent of GDP
while federal revenues slipped below 15 percent because of the financial crisis
and recession. We have not seen a budget deficit of this magnitude since World
War II, which surely was a greater challenge than recent economic troubles.
Apologists for the Obama administration argue that some 2009 spending, like
that on financial bailouts, is nonrecurring. True, but as the Congressional
Budget Office has reported, the trajectory of administration spending and
revenue is pushing the annual deficit toward $1,000,000,000,000 -- that's $1
trillion -- for the next decade.
Congressional Democrats' health care bills threaten to add to that. The bill
currently before the Senate is advertised as costing less than $1 trillion. But
significant spending doesn't kick in till 2014 and over the ensuing 10 years
adds up to $1.8 trillion, nearly double that.
Thanks to current low interest rates, servicing the debt costs the government
only $200 billion this year. But the White House estimates that debt service
will exceed $700 billion in 2019. "In a few years," the Economist editorializes,
"the AAA rating of Treasury bonds, the world's most important security, could be
in jeopardy."
(OK lets forget how much everything costs just keep spending because government should do everything. That is the attitude of those running our nation and some of us believe destroying the idea America was built on. Read more of the above story Damn the deficit: Full speed ahead on health care...)