“The cumulative deficit from 2010 to 2019 under the President’s proposals would total $9.3 trillion, compared with a cumulative deficit of $4.4 trillion projected under the current-law assumptions embodied in CBO’s baseline. Debt held by the public would rise, from 41 percent of GDP in 2008 to 57 percent in 2009 and then to 82 percent of GDP by 2019 (compared with 56 percent of GDP in that year under baseline assumptions).”
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Sunday, September 27, 2009
Do You Know Your Personal Bill For The National Deficit and Debt? Does President Obama Know or Care?
Do you know your share of the U.S. national deficit and debt? President Obama, do you know the cost to Americans of the national deficit and debt and do you care? If I dare to speak on behalf of the President please see the Summary of this post for his answer.
The title for this article links to the Bureau of Public Debt website which reports to the U.S. Treasury dept. I suggest you visit this site for interesting insights into the U.S. national deficit and debt. This article may be a fine 10,000 foot high accounting lesson on the U.S. budget, but it certainly is not a lesson on how we as Americans should strive to balance our own household budgets.
I want to draw distinctions between the national deficit and the national debt. For some background information on this national financial crisis, as of this posting the U.S. national debt is almost $12 trillion and rising as confirmed by the aforementioned Bureau of the Public Debt. But the actual national debt is in fact much larger than that if we account for unfunded liabilities of the U.S. Social Security and Medicare systems which stand at approx. $99 trillion today. If we account for these unfunded liabilities the national debt is approx. $111 trillion.
Over the years, the US government has stated several reasons why they don't include unfunded obligations in their official debt figures, with one of the most common reasons being that these programs are optional and can be cut at any time. However, with the exception of some proposed cuts in Medicare under both ObamaCare and BaucusCare bills, it doesn't appear that either of these unfunded liabilities are to be eliminated soon. The Obama 2009 fiscal year national deficit is projected to be a record $1.6 trillion.
These numbers and the impact to Americans today and future generations are staggering and it would be a gross understatement to qualify them as disturbing. So based on the above let's break these huge deficits and debts down from a couple of perspectives; definitions, cost/person and insight.
National deficit ($1.6 trillion): this is a fiscal year-by-year federal budget shortfall that results when the government spends more in a fiscal year than it receives in revenue. To cover the shortfall, the government usually borrows from the public by floating long- and short-term debt.
National debt ($12 trillion): the national debt represents the accumulated year-on-year national deficits plus accumulated off-budget surpluses. Therefore this $12 trillion dollar national debt is the accumulated U.S. debt from when the national debt was first incurred in 1791. Again this debt does not represent unfunded liabilities in the amount of approx. $99 trillion mentioned above.
It took the U.S. government 191 years – from 1791 until 1982 – to run up its first trillion dollars in debt. The second and third trillions got on the scoreboard much more quickly – each in just four years. By the time George Bush was inaugurated in 2001, the national debt stood at $5.7-trillion. He ran up more debt faster than nearly all of his predecessors combined: just under $4.9-trillion. The national debt stood at $10.6 trillion on the day Barack Obama took office. But if President Obama’s budget projections are accurate, he’ll run up nearly as much government debt in four years as President Bush did in eight years.
What does the national deficit and the national debt really cost the American taxpayer?
Using a U.S. population of approximately 307 million people, the following is the cost/person of the national deficit and the national debt as it currently stands.
• National deficit of $1.6 trillion: cost/person is $5,212. This amount represents each Americans portion of the 2009 U.S. national budget deficit.
• National debt of $12 trillion: cost/person is $39, 100. This amount represents each Americans portion of the 2009 U.S. national debt accumulated since 1791.
• National debt of $112 trillion: cost/person is $362,000 if we account for the $99 trillion in unfunded liabilities on top of the $12 trillion.
Therefore each and every American taxpayer today and to be born owes $5,212 of the national deficit and truly $362,000 of the national debt. THIS IS A REAL COST THAT EACH OF US IS BURDENED WITH AND FUTURE GENERATIONS, ergo, Sen. JOHN McCAIN’S MANTRA--President OBAMA'S BUDGET IS TANTAMOUNT TO "GENERATIONAL THEFT".
What national deficit did President Obama inherit?
President Bush left office at the end of 2008 with a record high $400 billion deficit. Fully aware of the deficit he inherited President Obama quadrupled President Bush’s record deficit by adding another $1.2 trillion to this number by fiscal year ending 2009. For those challenging the Bush national deficit inherited by President Obama please refer to the below national deficit chart prepared by the Washington Post, which graphically illustrates the handoff of the Bush 2008 national deficit and the Obama 2009 national deficit. The chart also illustrates President Obama's budget deficit spending spree of American taxpayer dollars over the next ten years compared to President Bush's past administration's much smaller deficits.
How did President Obama increase the national deficit?
President Obama started with the $400 billion dollar deficit inherited from President Bush and from there he added the following deficit spending bills to arrive at a $1.6 trillion 2009 national Deficit:
What are Congress’ plans for the 2009 $12 trillion national debt?
Basically Congress will be forced to raise the legal limit on the nation's credit card. The amount the government may borrow from the public, including foreign creditors, is limited by law to $12.1 trillion, a cap that has been raised several times since the nation slipped into recession in December 2007. Therefore due to President Obama’s runaway spending Congress must approve the national debt limit so that “…citizens and investors here and around the world can remain confident that the United States will always meet its obligations…” according to U.S. Treasury Secretary Timothy Geithner.
What did President Obama accomplish with these spending packages totaling $1.2 trillion?Obama budget reconciliation bill of $410 billionIn a word spending, spending and more spending of democratic "pork" programs. This measure provided fiscal 2009 funding for nine federal departments, covering all government activities other than defense and homeland security-related agencies, whose funding was approved last fall. Many agencies would see big increases, in some cases 10 percent or more above fiscal 2008 levels. Dissent over the measure was widespread. Some Republicans waged a high-profile battle against 8,500-plus spending provisions, known as earmarks. Other GOP lawmakers objected to generous funding increases in the midst of an economic crisis. The bill represents a bonanza for federal agencies that felt a budget squeeze for much of Bush's two terms. Mass transit, public housing, the National Institutes of Health, Head Start and the Pell grant program are all among the Democratic priorities that would see new federal money flow into their coffers. The independent watchdog group Taxpayers for Common Sense found 8,570 disclosed earmarks in the bill, worth $7.7 billion.
More than 200 days ago, Congress passed the immense $800 billion economic stimulus legislation, promising to "save or create at least 3.5 million jobs. This was an expensive, empty promise. At 9.7 percent, the unemployment rate stands at a 26-year high, and 2.4 millions jobs have been lost since President Obama signed the stimulus into law. Before the passage of the American Recovery and Reinvestment Act of 2009 (also known as the "stimulus bill"), President Obama and his chief economic advisor, Larry Summers, stressed that the government's response to the economic crisis needed to be "timely, targeted, and temporary." Government agencies have spent only a tiny fraction of money planned to be spent in fiscal years 2009 and 2010. Moreover, agencies have not allocated most of the money that has been directed toward them for any named projects. Fiscal year 2010 ends September 30, 2010, but the recession could end sooner than that. Indeed, a majority of economists surveyed in April predicted the recession will end in 2009 and Fed Chairman Ben Bernanke also thinks the recession will end this year. The stimulus bill threatens to miss the very target it was meant to address. In addition, President Obama claimed the stimulus bill was needed to avert disaster and irreversible decline. It will in fact shrink the economy over the long run, since its “increase in government debt is expected to displace or ‘crowd out’ . . . private capital.” See page 31 of the “Preliminary Analysis of the President’s Budget and an Update of CBO’s Budget and Economic Outlook”, which is the CBO document outlining the impact of the Obama budget.
Prospects for the Future
In 2008, Obama promised a “net spending cut” (although he never did come up with cuts to offset his proposed spending increases). Obama broke this campaign promise in a big way with his 2010 budget, which could bankrupt the United States, according to senior Senators. A Wall Street Journal/NBC News poll finds a solid majority of 58% said that the President and Congress should focus on keeping the budget deficit down, even if takes longer for the economy to recover. When asked what the most important economic issue facing the country is, 24% cited the deficit, vs. just 11% who named health care.
Apparently ignoring the WSJ/NBC poll and his 2008 campaign economic promise Presidents Obama’s budget for 2010 will explode the national debt while increasing taxes. That’s the conclusion of the Congressional Budget Office, controlled by lawmakers who support Obama. The following is a direct quote from the CBO in the aforementioned CBO link
The President’s proposed budget for 2010 therefore adds $4.9 trillion to the national debt,” increasing “the cumulative deficit from 2010 to 2019 to $9.3 trillion. The budget also adds $1.9 trillion in tax increases for individuals and businesses.
Do you want change? Do you believe in change? Change we can believe in! The audacity of hope and change!
Change? Mr. Obama did you mean changing a $400 billion national deficit into a $1.6 trillion national deficit for every American taxpayer? Change? By change Mr. Obama did you mean changing a national deficit from $4.4 trillion into $9.3 trillion?
“Change”-- “Do you believe in change?”-- “Change we can believe in”-- “The audacity of hope.” Empty words from an empty, vacuous, same old same old, tired, we’ve seen this before tax and spend ultra left wing radical politician known as Barack Hussein Obama.
The above unbiased and confirmed statistics tell the facts. President Obama is on a very organized, systematic path to tear down the economic fabric of the U.S and build it back up in his own socialist eyes. The original question posed in this post was "... and President Obama, do you know or care" about the cost to Americans of the national deficit and debt? Political Policy believes, yes, he does know the cost since he has been adamant in defending his first ever budget for Americans.
“Does President Obama care”?
Well, again, yes he does care in his own way. He cares in the same manner and in the same spirit in which he proposes all his polices. He knows what is best for Americans regardless of their independent cares, needs, future aspirations, goals and dreams. Because he will take upon himself to tell us what those cares, needs, aspirations, goals and dreams are for now. And apparently given the above frightening deficit and debt costs for all Americans living and soon to live President Obama will tell us those what those cares, needs, aspirations, etc are at any cost. It is up to all Americans to tell him otherwise.
For additional information on the current economic conditions stemming from the U.S. national deficit and debt please refer to the Political Policy post entitled "U.S. On Track For $9 Trillion Debt Over 10 Years".