Posted on 03/23/2011 9:00:14 AM PDT by IbJensen
CNSNews.com) – The Congressional Budget Office (CBO) says that President Barack Obama’s 2012 budget will cause large and persistent yearly deficits that will push the public debt to $20.8 trillion by 2021.
“Federal debt held by the public would double under the President’s budget, growing from $10.4 trillion (69 percent of GDP) at the end of 2011 to $20.8 trillion (87 percent of GDP) at the end of 2021,” the CBO said in its March 18 analysis of Obama’s 2012 budget.
This means that the debt incurred as a result of Obama’s planned decade of deficit spending would be worth 87 percent of the value of all the goods and services produced by the economy, the Gross Domestic Product (GDP).
This figure, known as the debt-to-GDP ratio, is used to illustrate the size of a country’s debt relative to its economy in order to show how stable a country’s finances are.
$20.8 trillion is also more than double the size of the current level of public debt, which is $9.6 trillion. It is also 1.4 times as large as the economy is today.
In a December 2010 issue brief, the CBO said that allowing the national debt to continue on its current path, as Obama’s budget does, would lead to less savings and investment because investors would buy more government debt.
“A growing portion of people’s savings would go toward purchasing government debt rather than toward investing in productive capital goods, such as factories and computers,” CBO explained.
“That ‘crowding out’ of investment would reduce the size of the nation’s capital stock by between 7 percent and 18 percent compared with what it would be if action was taken in 2015,” the issue brief said.
The CBO also predicted that this crowding out of capital investment would lead to lower wages, fewer jobs, and a weaker economy.
“The smaller capital stock would result in lower wages, which would diminish people’s incentive to work,” said the CBO. “In all, the delay would reduce the supply of labor by between half-a-percent and 2 percent.”
“The lower capital stock and labor supply would in turn reduce output by between 2½ and 7 percent, and total consumption by between 1½ and 5½ percent, compared with what they would be if action was taken in 2015,” the issue brief said.
Ultimately, the CBO warned that an uncontrolled federal debt would lead to a Greek-style fiscal crisis. Greece’s debt-to-GDP ratio at the height of its fiscal crisis was 115 percent.
“Higher debt would increase the likelihood of a fiscal crisis, in which investors would lose confidence in the government’s ability to manage its budget and the government would thereby lose its ability to borrow at affordable interest rates,” the CBO stated.
All of these statistics and predictions do not take into account what is known as off-budget or intra-governmental debt. This debt – essentially money the Treasury owes to other government entities – currently stands at $4.6 trillion and is not included in the CBO’s analyses of Obama’s 2012 budget.
However, intra-governmental debt is not the same as debt held by the public because the Treasury bonds that make it up are known as non-marketable securities, meaning they cannot be sold to other investors.
This means that, in practice, intra-governmental debt is really a commitment to future federal spending or public debt, since the non-marketable securities issued by the Treasury will have to be repaid using either tax revenue, new public debt, or both.
Even the hoarse-whisperer would have been better than this ego-tripping scumbag.
Obama in 2021? Now that is really scary.
Having seen the accuracy of the CBO numbers lately, I will assume that it will actually be 2014 when when hit these debt levels. I hope someone wakes up Speaker Boner to let him know his piddly 2 Billion in cuts a week ain't gonna cut it.
Wasn’t something like that what Carville wants? (40 More Years?) That would make Obama becoming Dictator In Fact (instead of Dictator In His Mind); and he’d be about 60 by then. Maybe by then, these “youth” in this country who have crowned him king will be ready to depose him. Of course, by then he’ll be as ensconced as Khadaffy is in Libya.
I know we are spending more money than we have, but at least the economy is getting better. /sarcasm
Bonehead is a real case. With his young guns they are really doing a job. Doing what?
More like $112T debt now.
And the Republicans are trying to bail out the sinking ship with a thimble.
People are going to raise children that are never able to leave the family home and start one of their own. Living in your mom’s basement will be the norm!
This was fairly typical during the Middle Ages. At least the kids could count on taking over the father's business and have a job when he died.
I couldn’t agree more with this comment on Fox Nation...passing it along...
Obama is the epitome and apex of Hypocrisy and Treason..
Obama and his reckless intentional destruction, of not only America’s National Security interest, but of our most trusted and closest Middle eastern ally, Israel, our Free World Western, and Middle Eastern Allies, as well as the Free World’s National Security.. Make no mistake about it, Obama is a danger, and a national Security risk, to America, Freedom and Liberty, of the entire Free World.. This is above all else, a warning.. Unless we, the Patriotic American People, can kick Obama out of Power, via Impeachment, resignation, or at the Ballot Box, America and the World are in serious danger.!! And this is just from a International perspective, let alone the National view, of his intentional destruction of the US Economy and the US National Debt, which is crushing the US Govt. and the US Dollar, and crippling US Businesses and the Economy...as well as the Social and Political destruction of our Society, in his blatant and arrogant disregard and subversion of the US Constitution, and all the Laws that he has ignored, like in his policies of illegal criminal alien amnesty, and by not enforcing the US Federal Immigration Laws, to come to America legally, not illegally..
Now he is giving Billions of Dollars to Brazil, so they can produce more Oil, of which America gets none of, while Obama prevents, and even sabotages America’s own Oil drilling and producing expeditions, to be Energy Independent, and now on top of that, he wants to get rid of all of our Nuclear weapons, sacrificing America’s Nuclear deterrent, and our US National Security, while spending Trillions of Dollars on his Socialist Marxist Welfare Entitlement programs, and keep NPR tax payer funding.. It just staggers the mind..
Economically and Politically, we, America and the American People, are now at serious risk and danger, and as such, Obama and his Policies, have put us there, and as such, is now, Tantamount to Treason against the United States Constitution, the Democratic Republic of America, and the American People. This I fear, will only get worse, as the coming months go by.. And when, and if, we finally get our Nation, and our Govt, back from Obama, he will have caused more harm and destruction, to America and the Free world, than could possibly be imagined, and will take years, if not decades to repair, and recover from.. even with the best possible American Constitutional Conservative U.S. President in office, Gov Sarah Palin, who by the way, just visited Israel this week, starting on Jan 20th, 2013.
And the CBO is known for underestimating.
that'll now be a goobermint job.nepotism for the nomenklatura.
These figures are utterly bogus:
1) the debt is actually over $14 trillion - the uncounted $4T is in non-marketable Treasuries owned by the Social Security Administration. Either the SS promise is real, in which case this is a legitimate debt of the country, or it isn’t real and shouldn’t be counted. Of course, if the latter is true, it might be nice to inform grandma and grandpa that they’re going to get cut off at some point.
By the way, the extra $4T would bring the debt to 100% of GDP.
2) The $20 T figure also doesn’t include the SS debt, which is lots larger then than the $4T its at right now. The true debt then will exceed 100% of GDP.
3) Revenue is highly overstated by the CBO - they’re counting on about a 50% increase in revenue in the next 2 years (impossible, it’d crash the economy), and continuous growth of about 3% (plus inflation).
4) Expenditures are way undercounted in the out-years. They always are by CBO, and in this age of trillion-dollar stimulus packages, no one is going to even care about penny-pinching. Obamacare has yet to go into effect, and it will NOT save money, it’ll cost trillions.
Note, however, that I’m really not too worried about the debt level in 2021 or beyond...because we’ll have long since defaulted on our debt before it gets to that point. Right now, the economy is a freight train headed downhill toward a ravine, with no brakes and the engineer pushing the pedal to the metal. We’ll be lucky to survive through the end of next year with our lifestyles intact. Beyond that lies default and incredibly expensive imports (esp. oil), which will give us Great Depression II which, like all sequels, will be worse than the original (by a lot, in this case).
Look on the bright side. The national debt won’t get that far before the end of the crash, repudiation and wars.
We are so screwed.
PING!
We are so screwed.
PING!
Sorry ‘bout the double post.
And they don't seem to GASh.
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