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Commentary: America is flat broke

The Congressional Budget Office released a report March 20 that stated President Barack Obama’s budget would result in annual deficits averaging more than $900 billion for the next 10 years.

The CBO reported the new official current-law baseline produces a 10-year deficit of $4.4 trillion, which is about $1.3 trillion worse than the January forecast (due to a newly enacted legislation – $1.3 trillion for the stimulus package – and a deteriorating revenue base – a loss of $1.3 trillion).

More importantly, the national debt officially surpassed the $11 trillion mark.

Former President George W. Bush was no free market advocate and would probably be hard pressed to articulate the difference between fiscal and monetary responsibility.

But if Bush was considered a freight train of domestic spending, Obama would be likened to a space shuttle.

Bush was the first president to spend in excess of 3 percent of the Gross Domestic Product on anti-poverty programs; Obama has already increased this year’s contributions to more than 20 percent.

Bush also created Medicare Part D – a drug-entitlement program – that will cost about $800 billion in the first decade; Obama has already proposed a $634 billion “down-payment” on a new government health care fund.

The new spending and entitlements list is seemingly endless.

As it stands now, every American man, woman and child’s portion of the national debt is $36,000.

That doesn’t even take into account the government’s off-balance sheet liabilities and unfunded retirement and health obligations. The real national debt is actually closer to $56 trillion – $483,000 per U.S. household.

The national debt level has long since passed the crisis benchmark. America is quickly approaching

The banks and investment houses are still reeling, unemployment recently passed 8 percent and there are no official policies to put America back on the right track (besides printing fiat dollars and throwing them into the wind).

For many decades, both sides of the political isle talked about reducing deficit spending and fiscal responsibility, but now the quote “deficits don’t matter” is echoed daily by the Washington elite.

This is sheer lunacy and is the definition of unsustainable.

How long can America under-produce, over-consume and ask the world to foot the cost?

Forget for a second that continuously borrowing with no hope of paying it back is morally reprehensible, the only other way for the government to continue spending is to increase theft
by inflation.

The Consumer Price Index gained an additional 0.6 percent in February, however food and beverage costs rose close to 5 percent alone. That was in just one month; wait until the full inflationary effects of the trillions of dollars the Treasury Department and the Federal Reserve System unloaded on the economy are realized.

Hyper-inflation? Probably not. But generational theft and the debasement of true wealth and capital, most definitely.

Enjoy your change. That is going to be all we are left with when the government is done confiscating the wealth of its citizens.

E-mail James Cannon II at [email protected].

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    LorrieMar 29, 2009 at 1:36 pm

    This is an awesome article. You deserve an award for this one. Very VERY good summation.