Obama’s fiscal folly will leave every American taxpayer $1 million dollars in debt.
Tomorrow marks two years to the day before we can finally rid America of the horrid reign of Barack Obama. A report that emerged last Friday gives us more reason to believe that his reign is not merely misguided but also pernicious.
Bloomberg Politics reported that Obama will ask Congress this year to bust discretionary budget caps by $68 billion. “That amounts to an almost 7 percent increase over discretionary-spending levels prescribed by automatic cuts known as sequestration voted into law in 2011,” Bloomberg wrote. And this is at a time when inflation is running at less than 1 percent.
Three days earlier, the Treasury Department announced that the official federal deficit for fiscal year 2014 had “dropped” to $483 billion (and $488 billion for the 2014 calendar year). That deficit, 2.6 times larger, even inflation-adjusted, than the one in 2007, is hardly reason to celebrate. It means that the federal debt has surpassed $18 trillion — the same size as the entire national economy, and six times annual federal revenue. Almost unimaginably worse, future unfunded liabilities are an astronomical $127 trillion.
Here’s what that means to the niece of mine born last month: She (and every other taxpayer) personally bears $1.1 million of that debt. The mind reels.
Obama’s proposal to further break the bank, in direct violation of an agreement he made in 2011, comes even as Social Security’s disability fund now stands only a single year away from depleting its entire reserve. By late 2016, according to Social Security trustee Charles Blahous, the disability portion of the combined Social Security trust fund will be able to pay only 81 percent of scheduled benefits. That number will continue to drop, making the most vulnerable members of our population the first ones to feel the pinch of a bankrupt system.
Of course, lawmakers won’t let that happen, but, in the short term, even the most reform-minded Congress imaginable almost certainly would find that the only way to bridge the gap is for Congress to appropriate more money from its “general” (non-entitlement) accounts — meaning, really, to borrow more money — to make the disability payments. Obama’s proposed $68 billion budget bust, also in annual appropriations, will make any such disability patch all the more devastating to our fiscal well-being. And the cost of bailing out the disability fund will continue to grow, without any obvious way to pay for it.
For comparison’s sake, consider that even using the most extravagant budget year of the famously feel-your-pain/heal-your-pain president Bill Clinton, the feds now are throwing hugely larger dollar amounts at discretionary budget items. The $332 billion of budget authority approved for domestic discretionary spending during Clinton’s last year in office (2000, making appropriations for fiscal year 2001) — the result of a reckless bidding war in which both sides forced up such spending by an astonishing 17 percent in one year while trying to buy favor for the skin-tight 2000 election — would amount to $444 billion today (after adjusting for inflation). Instead, we’re spending $531 billion this year. That’s nearly 20 percent above Clinton’s already-inflated baseline.
It’s utterly unsustainable.
What’s worse is that all the spending is for naught. We all know by now, of course, that the controversial “stimulus” package in 2009 stimulated almost nothing, leading even Obama to admit, at a meeting of his Jobs Council: “Shovel-ready was not as shovel-ready as we expected.” We’ve learned the hard way that greater government spending doesn’t jump-start the economy at all, which is the exact corollary, using syllogistic logic, to the conclusions of a recent study for the National Bureau of Economic Research indicating that spending restraint does next to nothing to deter economic growth.
The study also shows that tax hikes do indeed slow down the economy. To the extent that lower government spending also decreases the pressure to collect more taxes, low spending can actually play a part in spurring economic growth.
Obama is thus adding unsustainable debt without creating any short-term benefit, and indeed he is probably causing harm in the short term as well.
Add all these things up, and we see what can only be termed a willful and determined assault on the whole concept of fiscal responsibility. Either the conspiracy theorists are correct that Obama is pushing the Cloward-Piven strategy — deliberately overloading the fiscal system in order to foment a crisis that only an all-powerful government will be big enough to manage — or else he’s buying into the longstanding leftist notion, still advocated by the likes of loony Paul Krugman, that public debt doesn’t matter because we merely “owe it to ourselves.”
Even without assessing Obama’s damage to the culture, to foreign and defense policy, to criminal justice, and to the Constitution, Obama’s relentless efforts to push the national debt higher, if he succeeds, will be among the most baleful legacies of his benighted presidency.
And we still have two more years to go. It’s going to be a long, rocky ride.
— Quin Hillyer is a contributing editor for National Review. Follow him on Twitter: @QuinHillyer.