Newsfront OBAMA 2.0:


Debt Problem? What Debt Problem?


Kicking the can down the road seems to be the president’s idea of a quick fix.


N BY DAVID A. PATTEN


ow that president Obama has clarifi ed his intention to kick the U.S. entitlement crisis down the


road to a future administration, econ- omists are assessing just what that will mean for America’s future. In June 2010, the chairman of the


Joint Chiefs of Staff , Adm. Mike Mul- len, called the national debt “our big- gest national security threat.” The president’s own Simpson-Bowles defi cit commission warned, “America cannot be great if we go broke.” That provoked Associated Press


reporter Ben Feller to ask the presi- dent in February 2011, “Where is your leadership on that issue?” But the bud- get he proposed to the Senate that year was rejected unanimously: 97-0. Many observers naturally assumed


Obama would address entitlements after winning re-election. But instead, he told the nation that Medicare, Med- icaid, and Social Security “do not sap our initiative, they strengthen us.” By most estimates, the national


debt, if left unattended, will be about 20 percent greater the day Obama leaves Washington than it is today. Already, it is a staggering $16.4 trillion. And because hordes of baby boomers get closer to retirement age with each passing day, the fi scal chasm contin- ues to grow exponentially.


10 NEWSMAX | MARCH 2013 The Congressional Budget Offi ce


currently estimates that the national debt will reach 90 percent of GDP about four years after the president leaves offi ce. Some predict that will happen much sooner, given added entitlement spending in Obamacare. By 2025, according to the presi-


dent’s own debt commission, total government revenue will only be suf- fi cient to pay for four items: Medicare, Medicaid, Social Security, and interest on the national debt. Every other fed- eral activity — block grants, transpor- tation spending, the military, home- land security, you name it — will have to be fi nanced with borrowed money.


100% 80% 60% 40% 20% 0%


ROAD TO RUIN Obama has ignored the national debt, leaving a road of uncertainty for future generations.


Higher interest rates will reduce pro- ductivity by an estimated 15 percent. “Debt at this high a level has deeply problematic implications for the econ- omy and families,” the Heritage Foun- dation’s federal budget director, Ali- son Fraser, explains. “It means much slower growth, higher interest rates, and higher infl ation.” By 2028, just paying the interest on


U.S. debt will cost over $1 trillion per year. That year, by the way, just hap- pens to be the year the president will turn 67 — currently the offi cial retire- ment age. By then, the national debt won’t be Barack Obama’s problem. He’ll be retired.


UNSUSTAINABLE LEVELS OF DEBT OVER THE NEXT DECADE 89.7% 2012: 72.8%


Historical Average (1959–2008): 36.6%


28% 1993: 49.3%


2001: 32.5%


Projected 1970 1980 1990 2000 2010


2020 2022


SOURCES: Of ice of Management and Budget, Budget of the U.S. Government, FY 2013: Historical Tables, Table 7.1, February 2012, http//www. whitehouse.gov/omb/budget/historicals (accessed Aug. 8, 2012), and Congressional Budget Of ice, “An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022,” “Alternative Fiscal Scenario,” Aug. 22, 2012, http//cbo.gov/publication/43543 (accessed Aug. 23, 2012)


CAN, ROAD/ISTOCKPHOTO / CHART COURTESY OF THE HERITAGE FOUNDATION


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