Forwarded by a reader, this Wall St. Journal editorial provides a very clear summary of the administration’s deficit and spending binge and the fantasies on which it’s based:
Earlier this year when President Obama was selling his first budget blueprint, he promised to end years of “borrow and spend” budgeting. Yesterday, reality struck.
Mr. Obama’s White House and the Congressional Budget Office told us that current U.S. fiscal policy is “borrow and spend” on a hyperlink. The good news is the deficit for 2009 will be “only” $1.58 trillion, about $250 billion lower than expected thanks to less need for TARP funds. But the Obama fiscal plan envisions $9 trillion in new borrowing over the next decade, which is $2 trillion more debt than the White House predicted earlier this year. The 2010 deficit also rises by about as much as the 2009 deficit falls from January, so even the TARP windfall gets spent.
We’ve never fretted over budget deficits, at least if they finance tax cuts to promote growth or spending to win a war. But these deficit estimates are driven entirely by more domestic spending and already assume huge new tax increases. CBO predicts that debt held by the public as a share of GDP, which was 40.8% in 2008, will rise to 67.8% in 2019—and then keep climbing after that. CBO says this is “unsustainable,” but even this forecast may be optimistic.
The Journal’s editors are being kind to use the word “optimistic.” The more fair description is “delusional.” The progressive’s “plan” to control the deficit assumes Congress will hold spending to just the rate of inflation for the next 10 years – here’s a bipartisan reality check. Even funnier are the progressives’ assumption that crashing federal revenues will not just recover, but reach historic highs, sort of like running your credit cards to the max on the assumption you’re going to get that big raise. And the economic growth they’re counting on to provide those revenues is sure to be crippled thanks to the taxes imposed by their health-care reform plans and cap-and-trade scheme.
Whatever they’re smoking, I want some of it.
As I’ve said before, there are only three ways to pay for the deficits the Democrats are running (and growing): borrowing from overseas, leaving future generations saddled with the debt and its interest (think credit cards, again); printing money, which inevitably will cause high inflation and make creditors angry as their debt becomes worth less – and thus less likely to loan more; or raising taxes on everyone to massive levels, thus breaking another of the Lightworker’s promises and again crippling economic recovery.
And, let’s face it, they’ll probably come up with a combination of all three.
November, 2010, can’t get here fast enough.