06-22-2011, 03:25 PM
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Join Date: Sep 2010
| | Maybe We Should All Move To Greece
This is encouraging. Talk about hope and change. Of course, Obama never said what he meant by that phrase. It is now clear: hope you don't get to screwed as we change everything for the worse. NationalJournal.com - CBO Releases Daunting Long-Term Outlook - Wednesday, June 22, 2011
Increasing federal debt will be a growing burden on government action, crowding out lawmakers’ ability to adopt tax and spending priorities in good times and reducing flexibility during recessions, all while making a fiscal crisis more likely and hindering long-term growth, the nonpartisan Congressional Budget Office said Wednesday. |
In the annual Long-Term Budget Outlook, the legislature’s budget scorekeepers said that the ratio of debt to GDP this year will be 69 percent, 7 percentage points higher than last year. In 2021, the CBO predicts debt will reach 76 percent of GDP, but under a more dire—and more likely—scenario, the public debt will be 101 percent of GDP 10 years from now, well into the economic danger zone of 90 percent or more.
Last year, that worst-case scenario predicted a debt-to-GDP ratio of 87 percent in 2020, demonstrating that the public debt picture has worsened considerably, in part due to a bipartisan tax deal last year that reduced expected revenue.
While much of the debt is driven by the recession’s drop in tax revenues and government actions taken in response to the economic calamity, CBO highlighted the structural deficit that existed before 2007 and cites growing health care costs and the aging population as a major driver of government spending; federal health spending is set to grow from less than 6 percent of GDP today to more than 9 percent in 2035.
The CBO says that allowing the 2010 tax deal that extended Bush administration tax policies to expire as planned would be helpful in keeping government sustainable, noting “that significant increase in revenues and decrease in the relative magnitude of other spending would offset much—though not all—of the rise in spending on health care programs and Social Security.”
Of course, the CBO has shown itself to be - shall we say - a bit of a tool for the Obama White House with the CBO chief visiting a sitting President during a debate where CBO scoring could make or break legislation for the first time in history. Not to mention the magical growing scoring of ObamaCare that is indicative of a tap dance faster than a barefooted Michael Flatley on a hot bed of coals. Their ignorance is also shown above in their belief that removing the Bush tax cuts would help. Yes, let's increase taxes during a recession when consumer confidence has bottomed out. Let's take more money out of everyone's pockets at a time when gas prices and food are increasing at alarming rates. The dolts at the CBO don't get it - tax revenue decreases dollars spent by citizens, which causes the economy to spiral down. Look at what happened under Regan. A draconian decrease in taxes lead to - gasp! - MORE tax revenue as the private sector was allowed to grow at an unprecedented rate.
Either the CBO is staffed by a bunch of twits, or the old folks have retired who can remember the Reagan years and a new batch of ivy league half-wits educated under a liberal brain-washing system we call education are playing at being adults.
At least they are on the right track - we are on our way to Doomsville. But like everything else they have done, the CBO is overly optimistic. Look for future re-scorings to paint a more realistic picture as they CBO workers continue their real world education. They'll get there, and when they do, grab your ankles.