The Corner

Krauthammer’s Take

On Ben Bernanke’s warnings about the exploding budget deficit:

I’m interested in the timing of all of this. It seems as if now that health-care is behind us with all the smoke and mirrors and deception that went into the numbers that made it look OK, honesty has broken out on Capitol Hill.

So all of a sudden we’re going to hear from the chairman of the Federal Reserve and others how deep in debt we are . . . And now the numbers that Bernanke is talking about are numbers that are scrubbed of the absurd assumptions that the CBO had to make under instructions from its boss, the Congress.

So CBO had lower numbers because it assumed that the AMT, the alternative minimum tax, will not be fixed, which, of course, it will be. So that‘s going to add onto the deficit. It had to assume that all of the Bush tax cuts are going to expire, but, of course, Obama has promised [they] will only expire on the rich.

So as a result, the real numbers are — nine percent of GDP as a deficit in 2020 and a debt over 100 percent of the GDP, which puts us in the territory of a country like Greece — which means the only way out is hyperinflation, because no country can support $1 trillion in debt service.

So we’re going to have to start thinking about taxes and entitlements, and you’re going to hear about it after the November election. . . .

The reason why this [exploding national debt] story was underreported was because it got in the way of health care, which liberals were pushing, especially liberals in the media.

It [Obamacare] doesn’t only add a new entitlement, but it takes $1 trillion of what otherwise would be deficit reduction — half a trillion in cuts in Medicare and half a trillion in increase[s] in taxes — [and] instead of applying it [to] and reducing the debt, it applies it to a new entitlement. So it’s something that’s now unavailable — which makes our debt even worse.

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