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President Obama doesn't need the recently announced National Commission on Fiscal Responsibility and Reform to figure out how to prevent the debt from rising to apocalyptic proportions and ruining America for generations to come. It's not rocket science; it's a matter of presidential priorities and choices.
If the president opts to continue with the biggest ideologically based spending spree in history — risk to the economy be damned — federal spending for 2009-2020 will as a percent of GDP increase by an enormous 23% (or more) compared to the Bush/Clinton years, the government's gross debt (public plus internal) will as a percent of GDP equal or exceed Greece's, and catastrophe will follow.
Some analysts say that America's AAA bond rating is already in jeopardy and may be lost by 2014 at the latest.
In the alternative, if the president decides not to cavalierly sacrifice America's prosperity (and standing in the world) on the altar of his own ideological ambitions, he should at the very least stop stoking the crisis. He should not deliberately pile on top of the already bursting budget his extra $4.3 trillion of optional new spending in 2011-2020.
It's not for economic recovery (that's already provided for in extra 2009 and 2010 spending), and existing social safety nets are already automatically increased for inflation and population growth.
Instead, the extra $4.3 trillion is part of the long-term cost of targeted social programs and transfer payments in the president's expanding welfare-state policy agenda for America.
About $1.6 trillion of that extra spending can be saved by stopping at the end of fiscal 2010 the long-term spending increases enacted in 2009 under the umbrella of the American Recovery and Reinvestment Act and other similar legislation. Another $1.757 trillion of proposed new spending for refundable tax credits and other transfer payments for 2011-2020 is disguised by being buried in the "baseline" of the president's budget. And another $881 billion of spending increases in 2011-2020 is proposed by the president for an array of programs in the "mandatory" category.
If any of these spending increases is actually vital, surely it could be paid for by sacrificing a bit of the political pork that is stowed away in hundreds of underperforming federal programs already in the $40 trillion that the president plans for the federal government to spend in 2011-2020.
(When the Office of Management and Budget evaluated 900 federal programs in 2007, spending exceeded performance levels by $250 billion per year (or $2.5 trillion over a decade).
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Posted By: 321blastoff(85) on 3/26/2010 | 9:53 PM ET
Obama and the Democrats are in total denial as to the severity of the fiscal crisis. The country is doomed to absolute destitution if the TEA party line is not followed. Congress must stop spending all our money and giving it away. The people must stop them this November with a complete reversal of this trainwreck caused by the Democrats. Vote them out!
Posted By: jpdwn(200) on 3/26/2010 | 8:55 PM ET
The President's credibility rating is "0" as in ZERO. His performance so far makes is clear that any crisis is an opportunity for bigger government. If the Congressional Progressives can get away with plunging the nation and most of the world into a near financial meltdown by blaming "Wall Street" and greedy corporate interests (instead of CRA quotas, CDO authorizations, well timed mark-to-market regulations, etc. by our noble Congress), then they figure they can demagogue anything.
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