Obama Set To Double The National Debt Of Our Nation’s First 230 Years In Less Than 10 Years
He promised change, but I’m not sure this is what America had in mind:
In news leaked late Friday to the Reuters news agency, the White House conceded that the national debt will increase by $9 trillion over the next ten years, nearly doubling a national debt that now stands at $11.67 trillion.
Until now, the White House had been estimating that the national debt would increase by $7.108 trillion between 2010 and 2019. On Friday evening, Reuters reported that an unnamed senior administration official was saying that a report due from the Office of Management and Budget on Tuesday would indicate that the debt would actually increase by $9 trillion during that period, almost $2 trillion more than the administration had previously estimated.
Since the beginning of the republic in the late 18th century, the U.S. government has accumulated a total of $11.67 trillion in debt. In the next decade, under the budget plans the Obama administration has in mind, that debt will almost double to about $20.67 trillion.
The administration is planning to run an average annual deficit of about $900 billion—or almost a trillion dollars—for each of the next ten years.
Until this year, according to historical budget tables published by the White House Office of Management and Budget, the largest annual budget deficit the U.S. government ever ran was in fiscal 2008, when the deficit was $458.5 billion.
The average deficits the Obama administration is now planning to run in each of the next ten years will now amost double that.
There are three ways out of this. The easiest would be for our politicians to just stop spending. But that’s not likely to happen.
The other solution is for the economy to start growing. But with these massive deficits driving inflation and discouraging investment, that’s not likely to happen either. Indeed, the reason why the Obama administration had to up its own deficit projections was because their rosy predictions for economic growth in the coming years were about as believable as fairy tales. Obama’s people projected 3% GDP growth starting in April to the end of this year, and then 4% GDP growth starting in 2010 through 2013. That 4% clip would be double the roughly 2% growth we saw between 2004 and 2008, a time of relative economic strength (even if it was built upon government-created bubbles in the credit markets).
Nobody could possibly take those predictions seriously any more, so Obama and his people revised them to be more in line with reality. And the deficit figures jumped accordingly.
The final solution would be to raise taxes, and I think that’s going to be the end game. We’re going to see massive tax hikes to pay for Obama’s “throw deficit spending at it” solution to everything, but will that really fix the problem? The big news of late (though some of us have been talking about it for some time now) is the possibility of a double-dip recession. One in which we see a brief amount of recovery only to see a drop back into negative economic growth. If we raise taxes on this already weak economy we will see a double-dip recession.
I think (and the CBO predicted the same back before the “stimulus” spending was passed) that if Obama and the rest of the federal government had just sat on their hands we’d be starting a climb toward recovery at the end of this year. But as things stand now, with seemingly exponential growth in our national deficits and little doubt about impending tax hikes, economic recovery is a distant hope. I think we’re on rails heading toward a Japanese-style “lost decade.”
On a related note, how pathetic is it that alternative to Obama and his Democrats and their record-setting deficit spending are the Republicans….who oversaw record-setting deficits of their own when they were in power? The choices right now seem to be the party that grows government slowly, and the party that grows government exponentially.
Makes me think we need new leaders all the way around.
