National Debt Set to Double
The Office of Budget Management projected that the 2009 budget deficit would be $262 billion less than originally expected at only $1.58 trillion. However, the estimate for the 10 year deficit rose to $9 trillion.
Today it was reported that the Obama administration blames the 10 year deficit on the current crisis and the Bush administration. Odd that the White House would blame deficits 10 years from now on the policies of a prior administration all the while dramatically increasing spending to unprecedented levels. Why not blame Bush 41 or Carter?
One of the most alarming facts is that the current national debt is around $11.7 trillion. This would lead to a national debt of almost $21 trillion. This is expected to be 75% of our entire economy. The interest payments on that debt will severely cripple the U.S. for years to come.
The AC360 blog over at CNN did a nice job of summing up how this will be very bad for our economy. One striking figure is that it will burden future tax payers with over $900 billion in annual interest payments. Even if we payed back zero on the money that we are borrowing, we would have to pay $900 billion each and every year to keep the interest current. One would question where the money is to come from. Certainly not a 1% surcharge on wealth.
Deficits of that magnitude would be extraordinarily dangerous and irresponsible for the country. They would double the national debt, risk much higher inflation, saddle future taxpayers with annual interest payments of over $900 billion, make us even more reliant upon China as a creditor, and over time would weaken us as a great nation.
Many people are starting to question the estimating abilityof the current administration. Aside from updating the deficit numbers by almost 30% in a few months, they also changed the estimate for the retraction in GDP from 1.2% to 2.8%.
They have also mismanaged the impact of the stimulus. Back when the stimulus bill needed to be passed in the middle of the night, the American people were told that if we did nothing, unemployment could get as high as 8%. With the stimulus, unemployment is now at 9.4% and expected to reach over 10%.
This doesn’t even take into account the impacts of health care reform which the CBO estimates will cost trillions.
At some point we need to decide that the federal government can not keep borrowing from the future to pay for items that special interest groups are demanding.