Hidden in the Friday news dump is this rosy little story regarding our fiscal future – the Congressional Budget Office announced is projecting that Obama’s proposed budget will add $9.7 trillion to the debt over the next 10 years, which is $1.5 trillion more than the White House’s estimate of $8.5 trillion of debt put on the backs of the American taxpayers.
Can it get more fantastic? Oh yes. By 2020 our debt held by investors like China will have ballooned from $7.5 trillion to $20.3 trillion, roughly 90% of our projected economy.
And what’s being blamed? Low taxes, of course! The CBO seems to indicate that if Obama simply lets the Bush tax cuts expire and fixes the alternative minimum tax, everything will be golden. Nowhere is it mentioned that Congress should be forced to make belt-tightening spending cuts to go along with the tax hikes. After all, it would be awful if government had to be as responsible as its taxpaying citizens.
You can bet that reports like these are going to give the Obama administration cover for breaking its “no new taxes under $250,000” campaign pledge – indeed the mindset seems to be one of “spend, then tax to pay for it.” With these kinds of deficits and skyrocketing debt, short-term increases in taxes are going to be unavoidable to help pay for all of this, no matter who is in charge when the bill finally comes due. Taxpayers might be far more willing to stomach short-term hikes if they saw a commitment from government to simultaneously rein in spending to bring the budget and raised taxes more in line.
But we don’t see that at all from this administration. Instead, we see moves toward massive new health care entitlements while threatening to tax industry through carbon regulation laws, neither of which will help spur the economy to deliver greater tax revenues to federal coffers through prosperity. So, while the debt was racked up by Obama’s predecessors, he deserves blame for doubling down on deficit spending and failing to seriously address this looming crisis, never mind racking up $3 trillion of debt himself in two years. He has an agenda to ram through, after all.