When, If Ever, Will Obama Take Ownership for This
From the CBO via the Washington Post:
Now comes the CBO with yet more news of the sort that neither Capitol Hill nor the White House is likely to welcome: its freshly released report on the federal government's long-term financial situation. To put it bluntly, the fiscal policy of the United States is unsustainable. Debt is growing faster than gross domestic product. Under the CBO's most realistic scenario, the publicly held debt of the U.S. government will reach 82 percent of GDP by 2019 -- roughly double what it was in 2008. By 2026, spiraling interest payments would push the debt above its all-time peak (set just after World War II) of 113 percent of GDP. It would reach 200 percent of GDP in 2038.
This huge mass of debt, which would stifle economic growth and reduce the American standard of living, can be avoided only through spending cuts, tax increases or some combination of the two. And the longer government waits to get its financial house in order, the more it will cost to do so, the CBO says.
Unfortunately, the answer to the question of when Obama will take ownership of the debt crisis he is causing is likely "never." The most likely scenario is that Obama demands that we taxpayers, many of us who opposed his actions that led to this run-up of debt, take ownership for this debt via substantially higher taxes.
Dan:
This is worriesome, but please don't forget that Obama had a lot of help from the Bush administration and the GOP in Congress helping to ring up the debt we're currently facing. I'd hate to get to 2019 and have Democrats take all the blame, when the debt hurricane began sweeping the country back when the Republicans were in control.
June 29, 2009, 8:08 amJames H:
Yes, cue the "I inherited a big mess" excuse yet again. That may be true, but when one finds themself in a deep hole, it is best to stop digging. I'm not an economist, but as the debt approaches (or exceeds?!) 100% of GDP, how can raising taxes be an option? There is no more wealth left to tax. I guess you'd have to tax people's savings more. Any additional revenue would have to come from more taxes on dividends, interest, and capital gains (which aren't part of GDP).
When do the excuses about the previous administration stop and solutions come out of the new administration? Maybe now is not the time to completely re-engineer the power generation in the US or comlpetely overhaul a health system.
June 29, 2009, 10:43 amPhil:
No. If there is a crisis, what he will likely do is say screw it like Nixon did back in '71. This is one of the reasons why I never plan on buying government bonds; I love my country but not enough to throw away good money for no reason. What do you think, Coyote? How bad would it be? ESR does not seem to think it would be all that bad, and, apart from the jingoist rhetoric, I agree.
June 29, 2009, 3:13 pmMesa Econoguy:
Obama and his economic “advisors†are completely full of shit – none of their projections are anywhere near reality, and consequently no one believes them. They are so far off base it is now basically “throw a dart†time in economic circles.
These morons have no idea what they’re doing.
June 29, 2009, 5:53 pmtomw:
It is 'throw a dart time', but they will then draw the bullseye around wherever it lands.
July 2, 2009, 3:13 pmThis is sort of like "Let's you and him fight.." when the One spends all the money in the account, borrows as much as can be borrowed, spends that too, and then turns to whoever is at hand and says "hey, pay this bill." and walks away.
References to W are ridiculous when the total spending is compared. More in less than 6 months than two entire administrations. Phooey.
tom