The Washington press corps was all atwitter yesterday with the news that the budget deficit is shrinking and the red ink will hit a seven-year low of $514 billion this year and $478 billion next year.
Wait. This is progress? Half-trillion-dollar deficits would have been unthinkable a decade ago; now they are cheered as progress. We are living in an Obama era of diminished expectations.
But what hasn’t been advertised is the disgraceful longer-term outlook for our fiscal future, which took a turn for the worse. And Obamacare is the main culprit. In the long run, the budget deficit will be slightly more than $1.5 trillion WORSE than previously estimated.
In 2015, the deficit starts exploding again—to $912 billion in 2020, and then above $1 trillion annually from 2022 until the end of days. Is this really the path of fiscal righteousness?
By the way, one of the biggest ballooning expenses is interest on the debt, which rises from about $250 billion a year now to more than $800 billion in a decade. Wonderful: We will be paying more taxes not for vital public services, but to finance our past sins.
Meanwhile, the debt burden gets worse, not better. Our debt as a share of national output skyrockets from 72 percent to just shy of 80 percent of GDP within a decade. Obamacare contributes to this thanks to the massive costs of Medicaid expansion and driving an expected 2 million people from the workforce. The budget deal that relaxed the budget caps and sequestration also has ratcheted up spending in every future year.
This budget report is full of mostly rotten news, and it only fortifies the case for challenging President Obama’s demand for a “clean debt ceiling” extension with no reforms to get us off this reckless borrowing binge. A “clean” debt ceiling bill is a green light for Washington to keep up the binge spending. Ronald Reagan said it best: “This is like giving an alcoholic another drink.”
In modern psychology, this is called being an “enabler,” and let’s hope conservatives in Congress have better sense than that.