COLORADO SPRINGS, Colo., June 21,2015—Amid all the hoopla surrounding such serious national issues as gender and race confusion this week, and the very real tragedy of a madman’s attack on people in an historic black church, one key story has been under-reported in the mainstream media. That story is the federal government’s collision course with financial collapse.
The tea party has been vindicated. Not that anyone who associates with the tea party would wish harm on these United States, but the fact remains that it started as a response to out-of-control federal government spending.
The protest movement that became known as the tea party was launched in February-March of 2009 at the federal government first announced a trillion-dollar economic stimulus package and then a trillion-dollar increase in federal spending, tripling the national deficit.
Initially with congressional support and now made permanent by congressional inactivity, that jump is spending has been incorporated into the baseline federal budget. That the deficit has declined is due wholly to record tax receipts.
One third of the national debt—more than $6 trillion and growing every day—has been accumulated since 2009.
A warning that the government could be reaching the point of insolvency was delivered to Congress Monday by Keith Hall, director of the Congressional Budget Office (CBO). While this is surely a signal for the left to begin the Alinsky-style demonization of Hall, the Fiscal Times reports that his warning is little different from that of his predecessor Doug Elmendorf, who had been CBO director since 2009.
According to Hall’s testimony, the national debt would surge to over 100 percent of the total U.S. gross domestic product (GDP) by 2040, or a lot higher if current optimistic economic assumptions prove wrong. By 2040, federal debt held by the public will rise to a percentage of GDP last seen during the final year of World War II.
After World War II, the federal government essentially inflated its way out of debt. It did not hurt that in the wake of that devastating war, the U.S. economy was virtually the only industrial economy to survive intact. That certainly hasn’t been the case in the post-2009 period, during which the U.S. economy has continued to be sluggish at best.
History will decide the cause of the dire situation that we find ourselves in today. Was it the mistake of Keynesian economists and their penchant for government spending as the cure for all economic ills? Or was it the Marxists in the current administration trying to “fundamentally transform” our republic? The latter, arguably, seek to lessen the birth-pangs of the new social revolution (to borrow Marx’s words) by hastening that inevitable transformation.
Aside from the Fiscal Times, only the Wall Street Journal has reported anything about Hall’s testimony. But the reliably leftist Politico focused instead on the “cost” of repealing Obamacare, an analysis that was released by the CBO on Friday. Remember that in progressive-speak, taxes are “income” and a loss of tax money is a “cost.” The conclusion drawn by Politico is that repealing Obamacare will “cost” $353 billion, swelling the deficit by that amount.
When Congress voted to repeal the Independent Payments Advisory Board (IPAB; aka “Death Panel”) and the medical device tax last week, the president threatened vetoes unless alternative sources of “revenue” (i.e., taxes) would be found to offset the loss of “income.” (See how that doublespeak works?)
“Any way you slice it, repealing the Affordable Care Act will add hundreds of billions of dollars to the deficit,” said House Minority Leader Nancy Pelosi.
Not any way: Totally missing from the discussion was the possibility of offsetting spending cuts.
In other words, if we look back just a few years to the trillions of dollars in spending increases, there is plenty of room to offset the tax increases built into the Obamacare law that only partially paid for it.
…many people knew from the start that Obamacare would be a disaster – Daniel J. Mitchell, Feb. 6, 2014
By focusing only on the deficit, Democrats are hoping to lure fiscal conservatives away from repeal. Since the vast majority of congressional members are lawyers and not economists, it just might work.
Another factoid from Friday’s report seized upon by the left is the dubious assertion that repealing Obamacare will leave 19 million people uninsured. That assertion was echoed by Kaiser Permanente, which stands to lose a substantial sum of easy government money if people aren’t forced to buy health insurance.
The number 19 million itself is very interesting. It’s a lot closer to the more reality-based 17 million uninsured than the 47 million the left claimed existed when trying to sell the law to the American people in 2009-10. It also includes millions who were, despite grandiose promises from the president, summarily kicked off their existing plans to be added to new and more expensive government-approved ones.
The result is that the slow U.S. economy, the federal government’s budget troubles and the skyrocketing national debt are entirely self-inflicted problems caused by the Democratic Party’s myopic focus on creating a national healthcare system no matter what the cost or consequence.
The tea party said so in 2009 and has been fighting ever since to fix this disastrous situation. Vindication is nice, but fixing the root cause of our fiscal woes would be priceless.