This is from the Congressional Budget office report http://www.cbo.gov/ftpdocs/99xx/doc9957/01-07-Outlook.pdf The budget outlook 2009 to 2019
The Long-Term Outlook High deficits in the near term may be inevitable in the face of the financial crisis and severe economic weakness, However, once the nation gets past this downturn, it will still face significant fiscal challenges posed by rising health care costs and the aging of the population. Continued large deficits and the resulting increases in federal debt over time would probably constrain long-term economic growth by reducing national savings and investment, which in turn would cause productivity and wage growth to gradually slow. The rate of growth of spending on health care is the single greatest threat to budget balance over the long run, and such spending will have to be controlled in order for the fiscal situation to be sustainable in future decades.26 Together, outlays for Medicare and Medicaid (not including offsetting receipts) currently account for about 5 percent of GDP. Spending for those programs is expected to rise at a rapid pace over the next 10 years, outstripping the growth of GDP. By 2019, spending for those programs combined is projected to total about 6.3 percent of GDP. By 2050, it could reach 12 percent. Without changes to federal fiscal policy, those rising costs would drive the amount of debt held by the public significantly higher as a percentage of GDP than it is today.
Obama hopes at the end of his presidency to be ALMOST back to the deficits left at the end of Bush's term. Almost. And that is if EVERYTHING goes exactly as he plans.Bush left a deficit of 459 billion in 2008, in 2014 Obama hopes to have a deficit of 569 billion dollars. Everyone complained that under Bush, the deficit doubled to 11 trillion dollars. Why is it brushed under the rug that the deficit under Obama is projected to again almost double from 11 to 20 trillion. Big difference though , Bush added 5 trillion, Obama wants to add 10 trillion. Where are the screaming democrats now when it is Obama and not Bush that is spending us to death. Both parties are trying to out do the other and make themselves look like the all powerful presenters of gifts to the people. Just one issue, they are using our credit card to pay for the gifts.
And check this never spoken about item, Combined, individual and corporate taxes only contribute 65% of revenue. The remaining 35% is from Social Security and Medicare payroll taxes. This amount increases from $837 billion in FY 2006 to $1,138 billion in FY 2012. Of that, only one-fourth is used to pay benefits to current retirees.Through 2017, Social Security will collect more in tax revenues than it pays out in benefits. That is because there are 3.3 workers for every beneficiary and the tax rate is 12.4%. Although the excess revenue is deposited into a trust fund, it is immediately borrowed by the U.S. Treasury to use for other programs. Therefore, in FY 2008, $674 billion in receipts is “borrowed” from the Social Security trust fund. And when they talk about the deficit, that does not include the money from social security. And if you add in the borrowed money from SS, the budget deficit is already 50 TRILLION dollars right now. What do you think is going to have to happen in the next 10 to 20 years to fix that looming problem?
The government needs to be told that they are not special. The basic rules of economics really do apply to them and their pointy headed ideas. And we all need to be reminded that there is no such thing as a free lunch, someone has to pay for it somehow. And even though everyone today wants to believe you can just tax the rich, they can afford it. What happens when the rich become poor through huge tax increases, or just leave the US all together, who pays then? We all have to live within our means and that includes the federal government.
