February 2 2012
Groundhog Day… on the Debt
Nicole Kurokawa Neily
You may remember “Groundhog Day,” the Bill Murray movie from a few years ago where the main character is doomed to repeat his day over and over again. Alas, that’s the situation we’re in, as Congress prepares to (yet again) raise the debt ceiling and impose even greater obligations on future generations.
Yesterday, CBO Director Doug Elmendorf testified before the House Budget Committee on the CBO’s annual Budget and Economic Outlook for the country. (As a side note: I love that Elmendorf brought his children to the hearing, because they’re the ones who are going to pay for our current indulgences. Thanks, kids!)
Unsurprisingly, Elmendorf’s predictions for the years ahead were gloomy, with sluggish GDP growth anticipated to hover around 2 percent this year and to drop to 1.1 percent in 2013. In addition, unemployment is expected to rise back up to 8.9 percent by the end of the year, and to break 9 percent in 2013.
But that’s not all – Elmendorf also noted that the deficit would rise more than expected ($1.03 trillion, rather than the $973 billion originally forecast.) Depending on the steps that Congress takes in forthcoming budgets (actually allowing the doc fix to kick in, expiration of the Bush tax cuts, etc), our national debt will be between $21.7 trillion (at the low end!) and $29.4 trillion (at the high end) in ten years.
Now remember: the entire size of the U.S. economy in 2011 was approximately $15.2 trillion – so we’re in the dire position of owing more than we’re worth and never being able to pay it back. Sadly, it seems increasingly unlikely that even the greatest nation on Earth can grow its way out of this (particularly given the anti-business regulations and taxes being piled on productive members of society.)
The numbers are sickening, to be sure – but what’s even worse is that almost nothing’s being done to terminate departments and agencies to save money, or to seriously overhaul entitlement programs to put them on solid financial footing. Last week, the Senate rubber-stamped the debt ceiling increase – a far cry from last year’s outrage and activism. So much for the power of the purse.
To prolong the government’s spending problem is the worst form of taxation without representation – because the ones who will have to shoulder this burden (future generations) don’t have a seat at the table. It’s time our elected officials started acting like adults and making responsible decisions.