And So I Go: Yesterday, Today and Tomorrow

>>Obama’s Administration and Dems Congress Planting the Seeds of Disaster

Posted on: March 29, 2010

RealClearPolitics – Planting the Seeds of Disaster

The disaster of a bankrupt United States  will belong to Barack Obama and the Democrats Congress.  And we are not talking about a tiny little crisis like that of Greece (all but a few  of our states are larger than Greece!) we are talking about the riches country in the world.  Where we go the world goes.  This is in fact why the United States must be the one to fall to Global Government because the rest of the world will be forced to follow regardless of their wishes.  Read the following article in its entirety please since I have merely pulled out a few teaser comments.

On March 15, Moody’s Investors Service — the bond rating agency — published a paper warning that the exploding U.S. government debt could cause a downgrade of Treasury bonds. Just six days later, the House of Representatives passed President Obama’s health care legislation costing $900 billion or so over a decade and worsening an already-bleak budget outlook.Should the United States someday suffer a budget crisis, it will be hard not to conclude that Obama and his allies sowed the seeds, because they ignored conspicuous warnings. A further irony will not escape historians. For two years, Obama and members of Congress have angrily blamed the shortsightedness and selfishness of bankers and rating agencies for causing the recent financial crisis. The president and his supporters, the historians will note, were equally shortsighted and self-centered — though their quest was for political glory, not financial gain.

Two weeks before the House vote, the Congressional Budget Office (CBO) released its estimate of Obama’s budget, including its health care program. From 2011 to 2020, the cumulative deficit is almost $10 trillion. Adding 2009 and 2010, the total rises to $12.7 trillion. In 2020, the projected annual deficit is $1.25 trillion, equal to 5.6 percent of the economy (gross domestic product). That assumes economic recovery, with unemployment at 5 percent. Spending is almost 30 percent higher than taxes. Total debt held by the public rises from 40 percent of GDP in 2008 to 90 percent in 2020, close to its post-World War II peak.

To criticisms, Obama supporters make two arguments. First, the CBO says the plan reduces the deficit by $138 billion over a decade. Second, the legislation contains measures (an expert panel to curb Medicare spending, emphasis on “comparative effectiveness research”) to control health spending. (Nicer way of saying rationing!  BB)  These rejoinders are self-serving and unconvincing.

Suppose the CBO estimate is correct. So? The $138 billion saving is about 1 percent of the projected $12.7 trillion deficit from 2009 to 2020. If the administration has $1 trillion or so of spending cuts and tax increases over a decade, all these monies should first cover existing deficits — not finance new spending. Obama’s behavior resembles a highly indebted family’s taking an expensive round-the-world trip because it claims to have found ways to pay for it. It’s self-indulgent and reckless.

But the CBO estimate is misleading, because it must embody the law’s many unrealistic assumptions and gimmicks. Benefits are phased in “so that the first 10 years of (higher) revenue would be used to pay for only six years of spending (increases),” ex-CBO director Douglas Holtz-Eakin wrote in The New York Times. Holtz-Eakin also noted the $70 billion of premiums for a new program of long-term care that reduce present deficits but will be paid out in benefits later. Then there’s the “doc fix” — higher Medicare reimbursements under separate legislation that would cost about $200 billion over a decade.

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