Now we begin to really pile up the debt for our grandkids:
President Barack Obama’s budget will lead to deficits averaging nearly $1 trillion over the next decade, the CBO estimated Friday.
The Congressional Budget Office (CBO) said President Barack Obama’s budget would lead to annual deficits averaging nearly $1 trillion for the next decade.
The estimates are for larger deficits than the budget shortfalls expected by the White House.
Annual deficits under Obama’s budget plan would be about $976 billion from 2011 through 2020, according to a CBO analysis of Obama’s plan released Friday.
We need to freeze most of the federal budget and then begin gradually cutting spending. But do you get the sense that this is going to happen? No wonder there is the Tea Party protest movement. Something is really not right with the federal government.
It may feel good for some to blame this all on Obama. But the problem has been coming like a silent freight train for decades. Social Security and Medicare were structured wrong from the start. The pay-as-you-go structure of these programs is ill-suited for having a sudden wave of retirees like is coming as baby boomers begin retiring in mass.
Below is a chart I made in 2005 that shows where we have been headed. At this point I would say the red line is even steeper than that shown.
We need a Constitutional Amendment to limit the size of government as a percentage of GDP. And we need entirely new leadership in Washington, DC to tackle this spending problem.
For reference, below is a 2002 chart from the CBO that showed the projected size of just the federal government. You can see that we have known about this problem for a long time.
But, with real leadership, it is possible to reverse this trend. Just look at what New Zealand and Ireland did when they had good leadership.