Mission almost accomplished. Fail to the Chief:
Even with tax hikes and spending cuts, Mr. Obama’s budget foresees a record budget deficit of $1.6 trillion this fiscal year, sliding down to $706 billion in red ink by 2014, only to begin rising again as the baby-boom generation drives up the costs of Medicare and Social Security. By 2020, the federal debt will have risen from $7.5 trillion—or 53% of gross domestic product—last year to $18.6 trillion, 77% of GDP.
Kenneth Rogoff, a Harvard University economist who has studied other countries’ experiences, says debt levels already forecast would push the U.S. toward a tipping point where interest rates could soar, the dollar could plunge and the economy could face a crisis. “We will hit a point where it comes on us very quickly, and you don’t want to edge up to that point,” Mr. Rogoff said. “Going beyond 80% you’re taking a real chance.”
And this assumes revenues continue as projected, which will not happen, so the tipping point will come sooner than expected.
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Comments
I somehow think that is exactly what The One wants – to force a crisis and economic collaps. Why else say, "We simply cannot continue to spend as if deficits don't have consequences…." and then propose this monstrosity of a budget?
Apparently Bill Kristol even sees this (as noted on Gateway Pundit via Fox News).
Is Obama delusional? Or is this travesty intentional?
marie, read the Cloward-Piven Strategy and you will find the answer to your question.
So much of this federal spending is going for education programs that will actually diminish the emphasis on academics in our nation's public schools. The upcoming Indebted Generation will have even less knowledge and skills with which to generate the income to pay this enormous debt.
Title 1 is being renamed College-and-Career Ready Students as if education is just a label.
The looming abyss of insolvency will come regardless of the deficit if we do not address social security and medicare. I remember reading that the rosy projections (i.e. back when the economy was doing well) puts it somewhere around 2040. At that point those entitlement programs will swell to absorb all federal spending to include defense. Happy days ahead. Our politicians are going to have to address this third rail or we will all go down the toilet together.
votingfemale – I have read excerpts of Cloward-Piven. I have also read parts of Rules for Radicals. A rhetorical question, really. I never cease to be amazed that a monstrosity like this "budget" will be given a pass, knowing that all this MUST be intentional to cause a crisis and bring down the US economy. To me it is abominable.
I was giving The One the benefit of the doubt on the "delusional" part; cold, ruthless, and very calculated is more like it. Three more years of this…..can the US make it that long? The victories in VA, NJ, and MA give me hope. Prof. Jacobson's blog has been a beacon of reason and sanity, too.
Professor, there was a second money quote [pun unavoidable] in the article:
"But the White House was cautious, setting a goal of attaining by 2015 'primary balance' for the budget—equalizing revenues and spending, but excluding interest payments on the debt. The International Monetary Fund uses the primary balance standard for the world's poorest countries trying to get their fiscal houses in order."
So the USA hopes that by 2015 it will achieve the standard used to judge the worst economies. If that's what we are striving for, where are we now?!!
I'm teaching my kids that the debt isn't theirs. Neither their parents nor they ever voted for it. It was not used to improve our society to give them a 'better asset' to make up for the debt. Instead it is basically one group stealing from another – and even if lots of other people do that they know it is wrong to steal.