CBO: Federal Budget on an Unsustainable Path

We knew this already. At least those of us who live and function in reality knew this already. The CBO has declared that the president’s federal budget is a total bust and if he continues with his massive spending programs, he will sentence America to economic doom. Well, he didn’t say it exactly those words, but those are the emanations:

Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy.

The director then included a chart to show the trajectory we are on:

federal budget unsustainable.jpg

Power Line has this easier to read chart up on its site:

FederalDebt449.jpg

This is the CBO’s explanation of the chart:

Keeping deficits and debt from reaching these levels would require increasing revenues significantly as a share of GDP, decreasing projected spending sharply, or some combination of the two.

That is CBO-speak for we would have to raise taxes to shockingly high levels or cut spending to shockingly low levels or a combination of the two.

And this little nugget will make you feel all warm and fuzzy inside:

CBO projects that if current laws do not change, federal spending on Medicare and Medicaid combined will grow from roughly 5 percent of GDP today to almost 10 percent by 2035. By 2080, the government would be spending almost as much, as a share of the economy, on just its two major health care programs as it has spent on all of its programs and services in recent years.

And Obama and his leftist allies in Congress want to pile government run health care on top of this.

It’s funny how leftists’ Utopian ideals and reality violently collide to create one nasty mess. It’s going to be a long 3 1/2 years.

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