Tag Archives: National Debt

CBO: national debt will rise to $30 trillion in the next decade

Democrats took control of government spending in 2007
Democrats took control of government spending in 2007

The Washington Times has a warning for all the young voters who are freaking out over the spending promises of Hillary Clinton and Bernie Sanders.

Here it is:

The federal government will be flirting with $30 trillion in debt within a decade, the Congressional Budget Office reported Monday, blaming an aging population, new spending and tax cuts approved on Capitol Hill, and the growing burden from Obamacare for erasing the progress Washington had made over the past few years.

Analysts said Obamacare will chase more workers out of the labor force over the next five years, adding pressure to an economy still struggling to spring to life more than seven years into the Obama recovery.

The Affordable Care Act itself is still struggling to attract a customer base, the CBO said, lowering its estimate for the number of people who will sign up for the exchanges from 21 million to 13 million — a drop of nearly 40 percent in projections. Customers collecting taxpayer subsidies this year will be 11 million, down from the 15 million the CBO projected a year ago.

[…]Deficits will continue to rise over the next 10 years, topping $1 trillion again in 2022 and reaching $1.4 trillion in 2026, the analysts said.

Basically, we’ve dug ourselves into a whole with all this spending – taking money out of the productive private sector and giving it to the wasteful public sector.

How wasteful?

This wasteful:

The National Aeronautics and Space Administration is spending $80,000 to see what effects space flight has on oral herpes.

The federal space agency has awarded multiple grants and contracts to a researcher at the University of Florida to determine the “Effect of Spaceflight on Herpes virus Genome Stability and Diversity,” beginning last summer. The project recently received an additional $15,000 in December.

“The goal of this study will be to determine the changes in the genomic and mutational diversity that is present in the Herpes virus virome present in astronaut saliva and urine samples collected before, during, and after space flight,” according to NASA’s description of the research. “Ground subjects will serve as the control group providing saliva and urine samples preflight and postflight during the same schedule as the astronauts.”

That $80,000 was taken from private sector businesses and individual families. They could have spent it on jobs, innovation or consumer spending. But instead the government took it and wasted it on garbage.

Texas Senator Ted Cruz
Texas Senator Ted Cruz

There is someone who has a plan to deal with these deficits. And his plan is to shut down or scale back many government departments.

Ted Cruz:

For the individual income tax under his tax reform, Cruz’s plan provides for one flat rate of 10% on everything – wages, capital gains, dividends, personal business income, rent, interest, and all other forms of individual income. The corporate income tax would be abolished, and replaced with a 16% Business Flat Tax, which applies to sales of goods and services, minus all purchases and expenses for inputs for production. It automatically provides for immediate “expensing,” or an immediate deduction for all purchases of plant and equipment, and all other capital investment, which inherently involves purchases of inputs from other businesses. It is essentially a consumption tax for business.

That net business tax, which also automatically abolishes all special-interest, corporate-welfare loopholes, raises an enormous amount of revenue, $25.4 trillion over the first 10 years alone. This enables the plan to include abolishing the Social Security and Medicare payroll tax, which is the highest tax most working people pay, with Social Security and Medicare financed in full. It also enables the plan to include abolishing the death tax, the Alternative Minimum Tax, and all Obamacare taxes, as well as the corporate income tax. With a standard deduction of $10,000 per adult, and a $4,000 personal exemption, the first $36,000 of income for a family of four would be exempt from all significant federal taxes.

Because such tax reform would be enormously pro-growth, the Tax Foundation scores it on a dynamic basis as a net tax cut of $768 billion over the first 10 years. The Tax Foundation, which has developed a formal, sophisticated, and thorough economic model of the economy, estimates Cruz’s tax reform would create nearly 5 million new jobs, increase wages by 12%, and increase real economic growth over the next decade by nearly 14% more than under current tax policies. The after tax income of all workers would increase by 21.3% on average, with those in the bottom 20% of the income ladder seeing income increases of 15.3%.

Cruz intends to pay for these tax cuts by reducing the size and scope of government – pushing many federal responsibilities down to the state level, where there is more accountability to the people.

The four agencies are the standard four that most conservatives want to abolish or streamline:

  • Department of Energy (raises energy prices for individuals and businesses)
  • Department of Commerce (hands our taxpayer money to businesses favored by big government)
  • Department of Education (indoctrinates children in big government dogma, e.g. – global warming)
  • Department of Housing and Urban Development (caused the housing bubble recession by forcing banks to loan money to unqualified individuals, then bailed them out with taxpayer money)

Many other smaller government departments would be streamlined or eliminated. There would be a hiring freeze in the federal government, and pay increases would be based on merit, not tenure. Cruz would also save a trillion dollars over 10 years by repealing Obamacare, and replacing it with a consumer-driven alternative.

Although young people are in love with the idea that government will give them things by taxing others, that’s not sustainable. They ought to be voting for someone who wants to cut spending and cut government.

Under Obama’s socialist policies, youth “Misery Index” reaches record high

Young people usually only get one side of every issue - because we don't tell them the other side
Young people usually only get one side of every issue – because we don’t tell them the other side

Obama added $10 trillion to the national debt in his 8 years, doubling it from $10 trillion to $20 trillion. That will be placed on the backs of the next generation of younger Americans. But it turns out that they have many other problems as well.

This is from the College Fix.

Excerpt:

In the last two presidential elections, young voters served as a key demographic that helped catapult Barack Obama to the White House. What has he done for millennials in return? According to a new analysis, made them more miserable than ever.

Young America’s Foundation on Wednesday released its annual Youth Misery Index, calculated by adding youth unemployment, student loan debt, and national debt (per capita) numbers.

Today the youth unemployment rate exceeds 16 percent, and the average student in the class of 2015 graduated with a record $35,000 in student loan debt; national debt per capita, “a remarkable burden that will fall squarely on the shoulders of millennials,” is just under $59,000, the foundation reports.

With that, the index has spiked to a record high of 109.9 this year, up from 106.5 last January, and 83.5 in 2009 when President Obama took office, the foundation reports.

What about entitlement programs?

Business Daily reports on a Social Security problem:

The Social Security Trust Fund just suffered its first annual decline since Congress shored up the retirement program in 1983.

The unexpected $3 billion decline is an indication of the precarious state of Social Security’s finances. Since 2010, the program has been paying out more in benefits than it gets in tax revenue, but the trust fund, which earns about $95 billion a year in interest, had kept growing, though a little less each year.

[…]Under current policies, the CBO says the trust fund will be gone by 2029.

If nothing were done before that point, it would take an across-the-board 29% benefit cut — including on the oldest retirees and the disabled — to bring program costs in line with revenues.

Since we aborted the next generation of workers, we can’t afford to keep paying out benefits at the current rate. There are more people retiring than entering the work force. I hope they start to invest early, but what I am seeing is that they want to take out loans and travel the world for fun and thrills.

Obama doubled the national debt in 8 years
Obama doubled the national debt in 8 years

Anyway, on to the next problem, trillion dollar deficits. They’re back!

Investors Business Daily explains:

The federal budget deficit is back on the rise — by an expected $105 billion this year — the Congressional Budget Office said Tuesday, the first increase since fiscal 2009. Deficits topping $1 trillion will be back before you know it — three years sooner than expected.

[…]The CBO said the rise was primarily due to the year-end budget deal that extended, and in some cases expanded, corporate and individual tax cuts, as well as busting spending caps. The deficit-to-GDP ratio is expected to grow to 2.9% in fiscal 2016 from 2.5% last year. That would also be the first increase since 2009, with the trend getting worse in the years ahead.

From 2016 to 2025, the CBO expects cumulative deficits of $8.5 trillion — $1.5 trillion more than it predicted in August.

This is the budget deal that establishment Republicans like Paul Ryan supported. Rubio didn’t show up to vote against the Ryan deal. I assume that Rubio was OK with the spending bill passing, and these trillion dollar deficits returning. Cruz showed up to vote against the deal, of course.

And finally, the last problem – Obamacare is making health care more expensive than ever for the middle class.

Investors Business Daily again:

People making just $36,000 a year can easily end up spending 22% of it on health costs, even if they are enrolled in a subsidized ObamaCare insurance plan, according to a report from the Robert Wood Johnson Foundation and the Urban Institute.

[…]Individuals earning between 300% and 400% of the poverty level — which works out to roughly between $35,000 and $47,000 — will pay close to a median of 10% of their income on insurance premiums. (This group is eligible for ObamaCare insurance subsidies but at far lower levels than poorer people.)

And because ObamaCare plans typically come with high deductibles and copays, they’ll spend another 5% on out-of-pocket costs. For a worker making $36,000, the combined costs add up to $5,220.

The report found, however, that these costs could easily double. One in 10 people in this income group will end up devoting 22% of their incomes to insurance and out-of-pocket costs.

Even those in the lowest income group could get hit with big bills. One in 10 of those who make less than 200% of the poverty level will face health costs that eat up 18.5% of their income.

Obama likes to paint a rosy picture of the economy in his state of the union, but the real truth is not so rosy. Young people shouldn’t have voted for him, they are not going to live as prosperously as their elders did under Reagan and George W. Bush.

Democrats introduce bill to cover illegal immigrants under Obamacare

Gross public debt, Democrats control spending in 2007
Gross public debt, Democrats control spending in 2007

This is from the Daily Signal.

Excerpt:

The pope’s reminder of the Golden Rule during his visit to Congress inspired a House Democrat to introduce legislation to expand the Affordable Care Act.

Last week Rep. Luis Gutiérrez, D-Ill., introduced new legislation called the Exchange Inclusion for a Healthy America Act of 2015, which would allow illegal immigrants health care coverage under Obamacare.

[…]“The goal is to cover everyone in this country, regardless of immigration status, provided they establish state residency and file taxes (which most immigrants already do),” states the congressman’s Facebook page. “We have to make sure it’s accessible to everyone living here.”

[…]The bill proposed by Gutiérrez and co-sponsor Rep. Judy Chu, D-Calif., would amend Obamacare to permit illegal immigrants to purchase health insurance through Obamacare exchanges (also termed health insurance marketplaces) and receive coverage subsidies.

Wow! Is there no limit to this view on the left that the people who earn money don’t really have a right to spend it on the things they want to spend it on. I will never understand how it is that Democrats feel that they are being nice by spending other people’s money. If they wanted to hand out free goodies to some group of people, why don’t they use their own money? I need my money for the stuff I want to do. I guess they don’t see me as very important, except as a cog in their vote-buying machine.

Bernie Sanders’ $18 trillion spending plan will double the national debt

Gross public debt, Democrats control spending in 2007
Gross public debt, Democrats control spending in 2007

It’s election time, and Democrat politicians like Hillary Clinton and Bernie Sanders are busy promising the moon to their supporters.

Here’s what Democrat voters want from their candidates:

Transcript:

Let’s go to audio sound bites, this week here’s a portion of Ken Rogulski reporting on WJR in Michigan, two people here in line for Obama cash.

ROGULSKI: Why are you here?

WOMAN #1: To get some money.

ROGULSKI: What kind of money?

WOMAN #1: Obama money.

ROGULSKI: Where’s it coming from?

WOMAN #1: Obama.

ROGULSKI: And where did Obama get it?

WOMAN #1: I don’t know, his stash. I don’t know. (laughter) I don’t know where he got it from, but he givin’ it to us, to help us.

WOMAN #2: And we love him.

WOMAN #1: We love him. That’s why we voted for him!

WOMEN: (chanting) Obama! Obama! Obama! (laughing)

The two women are from Detroit, Michigan. Surprised? Detroit has been run by Democrats for decades, and that’s why it’s bankrupt. It’s not Republicans who run these cities into the ground – it’s Democrats, and their Democrat economic policies.

I don’t think these women are any different than your typical Hollywood high-school dropout actress, or your typical trial lawyer, or your typical unionized auto worker, or your typical MSNBC news anchor, or your typical professor of Marxist Studies. Democrats across all education levels and professions and levels of income have literally no idea how jobs are created. They have no idea how wealth is created. They just want to steal money from their neighbors, money that they didn’t earn themselves.

So it’s no wonder that they love what socialist candidate Bernie Sanders is telling them.

The Wall Street Journal – which knows something about business and economics – has done an analysis of how much the socialist agenda of Bernie Sanders will cost. The final price tag? $18 trillion dollars!

Read it:

Sen. Bernie Sanders, whose liberal call to action has propelled his long-shot presidential campaign, is proposing an array of new programs that would amount to the largest peacetime expansion of government in modern American history.

In all, he backs at least $18 trillion in new spending over a decade, according to a tally by The Wall Street Journal, a sum that alarms conservatives and gives even many Democrats pause. Mr. Sanders sees the money as going to essential government services at a time of increasing strain on the middle class.

[…]To pay for it, Mr. Sanders, a Vermont independent running for the Democratic nomination, has so far detailed tax increases that could bring in as much as $6.5 trillion over 10 years, according to his staff.

A campaign aide said additional tax proposals would be offered to offset the cost of some, and possibly all, of his health program. A Democratic proposal for such a “single-payer” health plan, now in Congress, would be funded in part through a new payroll tax on employers and workers, with the trade-off being that employers would no longer have to pay for or arrange their workers’ insurance.

Investors Business Daily has more to say about Sanders’ proposals:

His “Medicare for All” single-payer health plan alone would cost roughly $15 trillion over a decade.

He wants the government to provide “universal” child care and pre-kindergarten programs, along with free tuition at any public college, and proposes spending an additional $1 trillion on infrastructure and expanding Social Security by $1.2 trillion. Add up just these and a few other items on Sanders’ list, and price tag tops $18 trillion over a decade.

[…]And this doesn’t count the massive costs of mandates and regulations Sanders wants to impose on businesses, such as a $15 minimum wage, plus mandatory paid medical leave, vacations and sick days.

He’d also make it far easier for unions to organize.

Keep in mind that when Obama became president, the national debt was about $8 trillion. Now it’s $18.5 trillion, thanks to the Democrats. And if Bernie Sanders is elected, it will go to over $36.5 trillion! Who is going to pay for all this government spending? It won’t be illegal immigrants and ISIS “refugees”. It’s going to be you, your spouse, and your kids.

I am really hoping I can retire to a less demanding job before the Democrats force plans like this on all of us. When people like Sanders are in control, the worse thing you can do is work hard for a high income. You don’t want to be responsible for a homeschooling wife and mother, and a lot of kids that you are raising yourself. I understand that socialists want to take children away from parents as early as possible and communally raise them in day care and public schools. But that’s not what I am going to work to pay for. I am going to work to pay for my plan. I am not going to work to pay secularists to indoctrinate my kids in their false worldview. I don’t want to be a slave to the secular government. When I go to work, it’s for my plan, not for tyrants like Bernie Sanders to run my life.

Eight years of socialism: more debt, more regulation, fewer Americans working:

Has the economy been doing well lately? When I ask Democrats that question, they often point me to the stock market. I know that the stock market has done very well in the last 8 years. But I really question which Democrat policies have been responsible for this winfall.

Certainly, policies like Obamacare, Dodd-Frank, green energy subsidies, blocking Keystone XL, creating a student loan bubble, and even loosening mortgage lending again to create another housing bubble, cannot cause any economics growth. My personal opinion is that all the growth came from adding over $10 trillion dollars to the debt – a process that started with the election of Nancy Pelosi and Harry Reid to the House and Senate majorities, respectively, in 2007.

Look at the national debt:

Gross public debt, Democrats control spending in 2007
Gross public debt, Democrats control spending starting in 2007

If you add $10 trillion to the national debt in 8 years then OF COURSE the stock prices will go up. You would look richer too if you took your credit card balance from $8,500 to $18,500. But what is behind all this consumer spending and government spending? Just trillions of dollars of new debt.

I think a better measure of how the economy is doing is to ask job creators how it is doing. For example, we can ask small businesses, since they are responsible for so much of the job creation in this economy.

Here’s an article from the Daily Signal about that.

It says:

More than five years after the end of the “Great Recession,” only 21 percent of small businesses* say they have fully recovered. During the recession, lack of sales ranked as the top problem small business faced. Taxes placed second, and “government regulations and red tape” placed third. And since 2012, at least one in five small business owners identify government regulations as their most important problem.

The reason for this is simple—small business owners directly feel the impact of federal regulation in the daily life of their businesses. The small business owner is often the main person in a business who bears the burden of complying with regulations and paperwork requirements. According to a 2010 study, small businesses spend $10,585 per employee on regulation, which amounts to 36 percent more per employee than larger companies spend.

With that as a backdrop, it is easy to see how small business owners continue to wonder why Washington just does not get it when it comes to regulation. For decades, Congress has sought to solve societal problems through mandates on business. Too many Americans without health insurance? Congress tries to solve that by requiring businesses to provide health insurance to their employees (regardless of whether or not they can afford it) or pay hefty penalties. Too many Americans unable to care for a sick relative? Congress seeks to address that by mandating that a business keep a position open three months out of every year for qualified employees, using a cumbersome reporting system.

Always entrepreneurial, with a keen focus on the bottom line, the American small business owner looks for ways to minimize the time and money spent on things other than running his or her business. Since many of these regulations wisely exempt the smallest of small businesses, some employers purposefully do not increase hiring because they do not want to have to comply with the regulatory regimes that await businesses that expand to 10, 15, and 50 or more employees.

This might be why the labor force participation rate is at a 38-year low.

CNS News explains:

A record 94,031,000 Americans were not in the American labor force last month — 261,000 more than July — and the labor force participation rate stayed stuck at 62.6 percent, a 38-year low, for a third straight month in August, the Labor Department reported on Friday, as the nation heads into the Labor Day weekend.

[…]In August, according to BLS, the nation’s civilian noninstitutional population, consisting of all people 16 or older who were not in the military or an institution, reached 251,096,000. Of those, 157,065,000 participated in the labor force by either holding a job or actively seeking one.

The 157,065,000 who participated in the labor force equaled only 62.6 percent of the 251,096,000 civilian noninstitutional population — the same as it was in July and June. Not since October 1977, when the participation rate dropped to 62.4, has the percentage been this low.

So… do you still think that the economy is in good shape? Any economy is going to look better if you take an $8.5 trillion debt and run it up to $18.5 trillion. But if you look a little closer, you see that small businesses are hard-pressed, and it’s affected the real unemployment rate.