The new OFM Six-Year Outlook made it to the front page this week under the head "State goes from feast to famine on budget" (TNT, 4.26.06). This is not the budget hole we have been warning about the state dropping into, so we won't be doing any gloating, yet.
The omelette may have one fewer egg in the latest OFM (Washington Office of Financial Management) recipe, but it is not "feast to famine." We've had a couple of good years, but our family is growing and the farm is not. Under the leadership of Chris Gregoire we have a year's worth of canned goods in the cellar and we've stocked some staples, but there ain't no feasting in this house.
The "respite from budget woes" that will "end abruptly" is really only the underlying deterioration agitated by a bit of this and a bit of that. Most of it is mandatory, a bit of it the few new initiatives from the last session.
In fact, there are no changes to projected revenues from the February 15 version of the Outlook, and it is revenues that worry us. The housing boom is tapering off and higher fuel prices will squeeze retail sales. Even before that, where OFM sees a 5% underlying growth, we put it at under 4%. But maybe they are waiting on Chang Mook Sohn and the Office of Forecast Council to tweak revenues. [Not that oil prices and the Forecast Council have agreed on a direction yet. They're still debating. During the session, Mr. Sohn suggested prices in the $50-$60 per barrel range. A couple of years ago, the Council's forecast came out projecting a retreat in oil prices to under $30 just before they took off. Now they are $70-plus and rising.]
The whole budget situation was, of course, obfuscated immediately by Republican state senator Joe Zarelli, who threw out his tired old pitch and labeled it a "spending problem." I wish he would direct his remarks to his own party and the federal budget that is driving this country into the ditch.
Helen Sommers is chair of the House committee assigned spending (Appropriations). She points to the "unbelievably high costs in the medical area." Elsewhere there is mention of 12 percent "inflation" for medical assistance.
"Inflation" is a term for a general rise in the price level. A specific rise is called a "cost increase." It may be driven by increased participation in a program, or it may be an increase in the unit cost of a particular good or service, but there is not specific "inflation." This messy language messes up thinking, and it's been there for at least five years. (I know, "picky-picky.")
The substantial point is that comprehensive health care reform could solve everybody's problems. My friend who lost his job has VA coverage. But his wife doesn't. Nine hundred dollars ($900) per month. The state budget has big bills for the uninsured, partly insured, and a host of employees. Likewise the Feds and the local governments. Likewise businesses of every kind and size. This health care crisis is an inflating ring around our necks, and it's going to choke us all.
It needs to be dealt with as a particular cost increase. It is acute, not chronic.
Look for a fuller examination of the OFM Outlook on Prediction Tuesday in two weeks.
Showing posts with label Budget. Show all posts
Showing posts with label Budget. Show all posts
Saturday, April 29, 2006
Sunday, April 23, 2006
A Goulish Christmas for Corporate America - Iraq
The Center for Strategic and Budgetary Assessments sez:
2003 - $48 billion
2004 - $59 billion
2005 - $81 billion
2006 - $93 billion
On an accrual basis, the yearly costs are double and triple these. That is, the war materiel and human beings sacrificed have costs for replacement that we will not see this year or next. Remember when somebody got fired for saying the adventure might cost upwards of $200 billion? We are now spending $10 billion per month in Iraq and Afghanistan.
Stiglitz and Bilmes have estimated the eventual cost to be over $1 trillion, after indirect costs -- such as increased fuel prices -- are thrown in. That's $50,000 for every Iraqi man, woman and child.
And for this, they get 3 hours of electricity per day, unsanitary water, and a civil war. Not a very good deal for anybody. Well, it is good for the vendors of these faulty goods -- Corporate America. While ordinary Iraqis and ordinary Americans are paying in blood, bone and misery, Exxon, Boeing, Halliburton, Bechtel, and so on are raking it in.
Not by accident. The Bush administration, and Republicans in general, are champions and clients of corporate boards. (The Department of Defense web site calls it the biggest, baddest "company" in America.) The war, its supporters, its apologists, and its beneficiaries are primarily corporatists.
They were hired to secure and rebuild a devastated a country. In that they have failed. Not fallen short. Failed. They have taken the money and provided nothing but excuses. Some, including the Seattle Times, have called for a halt to the rebuilding because it, or security for it, is too expensive. More appropriate is a START to rebuilding, by people who can do the job, not the US corporate oligarchy. Start with an independent contracting office through the UN. Security costs disappear when the natives are doing it for themselves.
Some time ago I estimated the cost of corruption in the Bush Iraq adventure would be over $10 billion. Out of a rebuilding budget of $20 billion, this seemed to be pretty aggressive. But it's not only the rebuilding, it's the profiteering of suppliers and opportunism of the oil giants.
ERROR, ERROR. ($50,000, not $500,000) This post included too many zeros. At more than one trillion dollars net cost to the US for the Iraq War, as suggested by Stiglitz and Bilmes, each of the 26,074,906 Iraqi men, women and children would account for only $50,000, not the $500,000 I allowed to get online. Forgive, please. Ouch, ouch, ouch, ouch. Yes, I will apologize personally to your friends if you dropped that number on them as a result of my foolishness.
2003 - $48 billion
2004 - $59 billion
2005 - $81 billion
2006 - $93 billion
On an accrual basis, the yearly costs are double and triple these. That is, the war materiel and human beings sacrificed have costs for replacement that we will not see this year or next. Remember when somebody got fired for saying the adventure might cost upwards of $200 billion? We are now spending $10 billion per month in Iraq and Afghanistan.
Stiglitz and Bilmes have estimated the eventual cost to be over $1 trillion, after indirect costs -- such as increased fuel prices -- are thrown in. That's $50,000 for every Iraqi man, woman and child.
And for this, they get 3 hours of electricity per day, unsanitary water, and a civil war. Not a very good deal for anybody. Well, it is good for the vendors of these faulty goods -- Corporate America. While ordinary Iraqis and ordinary Americans are paying in blood, bone and misery, Exxon, Boeing, Halliburton, Bechtel, and so on are raking it in.
Not by accident. The Bush administration, and Republicans in general, are champions and clients of corporate boards. (The Department of Defense web site calls it the biggest, baddest "company" in America.) The war, its supporters, its apologists, and its beneficiaries are primarily corporatists.
They were hired to secure and rebuild a devastated a country. In that they have failed. Not fallen short. Failed. They have taken the money and provided nothing but excuses. Some, including the Seattle Times, have called for a halt to the rebuilding because it, or security for it, is too expensive. More appropriate is a START to rebuilding, by people who can do the job, not the US corporate oligarchy. Start with an independent contracting office through the UN. Security costs disappear when the natives are doing it for themselves.
Some time ago I estimated the cost of corruption in the Bush Iraq adventure would be over $10 billion. Out of a rebuilding budget of $20 billion, this seemed to be pretty aggressive. But it's not only the rebuilding, it's the profiteering of suppliers and opportunism of the oil giants.
ERROR, ERROR. ($50,000, not $500,000) This post included too many zeros. At more than one trillion dollars net cost to the US for the Iraq War, as suggested by Stiglitz and Bilmes, each of the 26,074,906 Iraqi men, women and children would account for only $50,000, not the $500,000 I allowed to get online. Forgive, please. Ouch, ouch, ouch, ouch. Yes, I will apologize personally to your friends if you dropped that number on them as a result of my foolishness.
Thursday, February 9, 2006
Who is counting the bodies here at home?
The AP counts the Americans who die in Iraq and Afghanistan, but is there anyone who counts the lives lost to the Bush incompetence here at home? With the Hurricane Katrina fiasco with Michael Brown at FEMA, the elimination of the long-promised but never delivered help on winter heating bills, the Medicare Part D debacle (overseen by Mark McClellan, brother to presidential spokesman Scott McClellan), and now the Scroogian budget cuts, Americans are making sacrifices not for principles or ideals, but for incompetence, elitism and cronyism.
These are real people, real lives, real suffering, and they deserve to at least be a number on a list somewhere, and not swept under the rug with the forgotten promises and pyrric victories.
All the damage is not accidental or a result of ineptness. Much of it is intentional, driven by ideology and hubris. CBPP reports that the president's budget cuts for 2007 are only the tip of the iceberg (or the fin of the shark, since the icebergs have melted). OMB omitted explicit information about the out years, those after 2007, from its budget documents, but CBPP obtained Administration computer runs that allowed it to piece together the story.
Relative to OMB's 2006 baseline:
Veterans programs would be cut $10.3 billion over the next five years, primarily health care services, a cut of 13% in 2011.
Energy programs touted in the state of the union get a big 29% cut by 2011
Environmental and natural resources cut by 22%, $28.1 billion over five years.
Education. Higher education cut 20%, K-12 and vocational education cut 13%, including community college funding and job training.
Health programs down 13% by 2011, a cut of $21.9 billion over five years.
And so on. Cuts in programs like this, also hurt the economy's base. These are economic depressants, or whatever the antonym to stimulus is. These cuts do not significantly alter the projected deficits, but they do give some wiggle room for more tax cuts.
Surprised?
These are real people, real lives, real suffering, and they deserve to at least be a number on a list somewhere, and not swept under the rug with the forgotten promises and pyrric victories.
All the damage is not accidental or a result of ineptness. Much of it is intentional, driven by ideology and hubris. CBPP reports that the president's budget cuts for 2007 are only the tip of the iceberg (or the fin of the shark, since the icebergs have melted). OMB omitted explicit information about the out years, those after 2007, from its budget documents, but CBPP obtained Administration computer runs that allowed it to piece together the story.
Relative to OMB's 2006 baseline:
Veterans programs would be cut $10.3 billion over the next five years, primarily health care services, a cut of 13% in 2011.
Energy programs touted in the state of the union get a big 29% cut by 2011
Environmental and natural resources cut by 22%, $28.1 billion over five years.
Education. Higher education cut 20%, K-12 and vocational education cut 13%, including community college funding and job training.
Health programs down 13% by 2011, a cut of $21.9 billion over five years.
And so on. Cuts in programs like this, also hurt the economy's base. These are economic depressants, or whatever the antonym to stimulus is. These cuts do not significantly alter the projected deficits, but they do give some wiggle room for more tax cuts.
Surprised?
Sunday, February 5, 2006
Rainy Day Fund
"First, assume the can opener," said the economist to his fellow castaways. The motley group was tranded on a desert island, surrounded by miles of open sea, but blessed with the unlikely good fortune of having cases of canned goods float in on some wreckage. Unfortunately they had no way to open the cans. All the suggestions were messy or impractical, like hurling cans from atop the palm trees onto rocks or gnawing them open with their teeth. The economist penetrated the situation with logic.
You might say those of us who advocate a rainy day fund are like the economist assuming the can opener. We call for it when we need it, but forget about it when there is a surplus. (You might say that, I don't.) Here we have a budget shortfall. Wouldn't it be nice to have a rainy day fund so we don't have to raise taxes. Sheesh, of course, a rainy day fund instead of taxes. A no-brainer. So we set about creating a rainy day fund from our imagination. See how practical we are?
I was reminded of this when I was visiting Bellingham last weekend [to see a brilliant student production of Jean Anouilh's Antigone directed by Emily Harvey, a junior in the theater program there]. I stayed over with some friends, and the next morning opened the Bellingham Herald and found a piece by Dick Startz of the UW's Economics department.
Professor Startz does better than most. For example, he understands that job growth is the most reliable general-purpose economic indicator. He recommends not allowing a raid on the rainy day fund unless job growth is below 1%. That's fine.
But, a reminder: We don't have one to raid. Professor Startz implicitly suggests constructing one from the current state budget surplus. But as I've said here before, this surplus is really only a temporary cash flow anomaly. The "plus" now is from the housing boom. It will be a minus later, probably carrying over the same exclamation point.
Governor Gregoire has the right idea. Her $900 million in reserves does not constitute a rainy day fund, but a simple set aside for next biennium. Mandatory expenditures await us there that will swallow up the $900 million and come looking for more. (Did you see her State of the State speech where she was gesturing up and down to demonstrate the roller coaster. Made me queasy just to watch it.)
Now, on this stage, your humble servant is going to do what the economist on the desert island could not, what in spite of his endowed chair and many honors Professor Startz could not. I am going assume a rainy day fund that could actually come into being. Now. Today. Present tense. (Could. I'm not saying should.) Ready?
Debt-financed! Ta-da!
Yes. We borrow it now before interest rates get out of sight, and pay it back in good times.
Why is this better? One: We could have it when we need it. Two: Reducing state spending to fill the fund in good times, even if it were politically possible, would depress economic activity without a good reason. We might be forced to use our rainy day fund before we could even admire very long. State spending and services are key supports to our economy. The idea that government is a vampire feeding on the vigorous private sector economy is nuts. It is a story repeated often enough to gain currency among the easily persuaded, but it is still nuts. Three: It's cheaper to borrow in bad times. Not so much competition.
Objection 1: We cannot borrow like that. The state is required to balance its budget.
Wrong. Washington has a limit on the percentage of the budget going to debt service, and traditionally this has been reserved for capital construction bonds. But there is no constitutional requirement that the budget be balanced. (If you're about to rant about spendthrifty liberal pinko queers, check the federal budget deficit and your party affiliation, or log onto Tim Eyman and the Renegade Right. Then come back for a little liberal responsibility.)
Objection 2: You assume we can pay it back. With the current revenue architecture, that day will never come.
Touche. (Remember I said could?) It doesn't make sense to create a fund if we can't pay it back. And if you don't like debt financing, you're out of luck anyway, because we will never have a surplus big enough to fill such a fund. Our current revenues are barely adequate this year. They won't be in the next biennium and in all biennia thereafter. Budget drivers like health care costs on one side and eroding revenue from Eyman, et al, on the other, will open a gap that will never close.
Objection 3: We have no idea how big a rainy day fund should be. Downturns typically last more than a year. We want to get off the roller coaster, not just delay the drop.
Ouch. That's right. Some national groups have suggested five to fifteen percent of expenditures is a good size for a rainy day fund, but that not much more than an arbitrary, generalized guess. Individual states have idiosyncratic tax schemes and will thus have different variability from high to low. They have different economies as well, and different expenditure patterns. (The state with the biggest rainy day fund as a percentage of expenditures is Alaska. Alaska subsists on oil revenue, completely stable, not requiring any rainy day fund at all.)
I once calculated on the back of an envelope that Washington would need about 85 percent of its annual operating budget to completely iron out its historical ups and downs. That's $20 to $25 billion. Much more than the $5 billion that is most commonly talked about. Also much more than we could possible borrow for such a purpose.
But there is a concept that was once used at the federal level (when they knew what they were doing). It is called the "full employment budget." You may remember "structural deficits." Structural deficits were calculated from what revenues and expenditures would be at a level of "full employment," assuming away the current actual economic situation. This revealed the underlying adequacy of revenues (or excess of expenditures, if you like). The state of Washington has a structural deficit. A "structural budget" could tell us not only what size a rainy day fund should be, but would help us know what the baseline level of revenue should be.
A rainy day fund is only practical in the presence of a balanced and adequate revenue architecture -- the ultimate can opener.
You might say those of us who advocate a rainy day fund are like the economist assuming the can opener. We call for it when we need it, but forget about it when there is a surplus. (You might say that, I don't.) Here we have a budget shortfall. Wouldn't it be nice to have a rainy day fund so we don't have to raise taxes. Sheesh, of course, a rainy day fund instead of taxes. A no-brainer. So we set about creating a rainy day fund from our imagination. See how practical we are?
I was reminded of this when I was visiting Bellingham last weekend [to see a brilliant student production of Jean Anouilh's Antigone directed by Emily Harvey, a junior in the theater program there]. I stayed over with some friends, and the next morning opened the Bellingham Herald and found a piece by Dick Startz of the UW's Economics department.
Professor Startz does better than most. For example, he understands that job growth is the most reliable general-purpose economic indicator. He recommends not allowing a raid on the rainy day fund unless job growth is below 1%. That's fine.
But, a reminder: We don't have one to raid. Professor Startz implicitly suggests constructing one from the current state budget surplus. But as I've said here before, this surplus is really only a temporary cash flow anomaly. The "plus" now is from the housing boom. It will be a minus later, probably carrying over the same exclamation point.
Governor Gregoire has the right idea. Her $900 million in reserves does not constitute a rainy day fund, but a simple set aside for next biennium. Mandatory expenditures await us there that will swallow up the $900 million and come looking for more. (Did you see her State of the State speech where she was gesturing up and down to demonstrate the roller coaster. Made me queasy just to watch it.)
Now, on this stage, your humble servant is going to do what the economist on the desert island could not, what in spite of his endowed chair and many honors Professor Startz could not. I am going assume a rainy day fund that could actually come into being. Now. Today. Present tense. (Could. I'm not saying should.) Ready?
Debt-financed! Ta-da!
Yes. We borrow it now before interest rates get out of sight, and pay it back in good times.
Why is this better? One: We could have it when we need it. Two: Reducing state spending to fill the fund in good times, even if it were politically possible, would depress economic activity without a good reason. We might be forced to use our rainy day fund before we could even admire very long. State spending and services are key supports to our economy. The idea that government is a vampire feeding on the vigorous private sector economy is nuts. It is a story repeated often enough to gain currency among the easily persuaded, but it is still nuts. Three: It's cheaper to borrow in bad times. Not so much competition.
Objection 1: We cannot borrow like that. The state is required to balance its budget.
Wrong. Washington has a limit on the percentage of the budget going to debt service, and traditionally this has been reserved for capital construction bonds. But there is no constitutional requirement that the budget be balanced. (If you're about to rant about spendthrifty liberal pinko queers, check the federal budget deficit and your party affiliation, or log onto Tim Eyman and the Renegade Right. Then come back for a little liberal responsibility.)
Objection 2: You assume we can pay it back. With the current revenue architecture, that day will never come.
Touche. (Remember I said could?) It doesn't make sense to create a fund if we can't pay it back. And if you don't like debt financing, you're out of luck anyway, because we will never have a surplus big enough to fill such a fund. Our current revenues are barely adequate this year. They won't be in the next biennium and in all biennia thereafter. Budget drivers like health care costs on one side and eroding revenue from Eyman, et al, on the other, will open a gap that will never close.
Objection 3: We have no idea how big a rainy day fund should be. Downturns typically last more than a year. We want to get off the roller coaster, not just delay the drop.
Ouch. That's right. Some national groups have suggested five to fifteen percent of expenditures is a good size for a rainy day fund, but that not much more than an arbitrary, generalized guess. Individual states have idiosyncratic tax schemes and will thus have different variability from high to low. They have different economies as well, and different expenditure patterns. (The state with the biggest rainy day fund as a percentage of expenditures is Alaska. Alaska subsists on oil revenue, completely stable, not requiring any rainy day fund at all.)
I once calculated on the back of an envelope that Washington would need about 85 percent of its annual operating budget to completely iron out its historical ups and downs. That's $20 to $25 billion. Much more than the $5 billion that is most commonly talked about. Also much more than we could possible borrow for such a purpose.
But there is a concept that was once used at the federal level (when they knew what they were doing). It is called the "full employment budget." You may remember "structural deficits." Structural deficits were calculated from what revenues and expenditures would be at a level of "full employment," assuming away the current actual economic situation. This revealed the underlying adequacy of revenues (or excess of expenditures, if you like). The state of Washington has a structural deficit. A "structural budget" could tell us not only what size a rainy day fund should be, but would help us know what the baseline level of revenue should be.
A rainy day fund is only practical in the presence of a balanced and adequate revenue architecture -- the ultimate can opener.
Thursday, February 2, 2006
This is the good stuff
The connection between Kitzhaber and Gregoire on evidence-based medicine was confirmed recently in a hearing before the House Appropriations Committee. John Kitzhaber is former governor of Oregon who is mounting a full-scale promotion of organized, sane health care. Chris Gregoire is the new Washington governor bent on making changes that make sense.
The podcast link to that hearing is here. The Appropriations Committee does it in other media too. It's great stuff. It is also leadership, figuring out where we need to go and setting about getting there.
I guess I'm behind the curve on this. I didn't realize drugs weren't measured against each other to gauge effectiveness. They're measured against a placebo. Part of evidence-based medicine ("evidence of effectiveness and benefit") is setting up comparisons between drugs and drugs or drugs and other procedures.
Surgical procedures are analyzed for effectiveness. The gastric bypass, for example, was determined to be effective, but only for the morbidly obese.
Providers are judged, too. If one clinic has a significantly higher success rate than another, why are we not funneling state business to that clinic?
What makes most sense is having independent analysts examine the material, the studies. People without a horse in the race judging providers, discounting biased trials and phony findings. They're doing this at the Oregon Health and Sciences University. John Santa from that school's Center for Evidence Based Policy was there to testify.
While Kitzhaber has said, "It's too late for incremental change," a good first step is getting state capacity in this area. State Health Care Authority administrator Steve Hill estimated 25 to 30 percent of the $4 billion spent on health care annually is wasted (compare to $350 million per year total budget for projects under the 9-cent gas tax). Only a fraction of this waste is in administration, the rest is "overuse, under use, and misuse in health care treatment."
Administrative savings in the health care field can be found aplenty, too. But don't look at government programs. That address is Private Corporate Health Care Insurance Company, Inc. For a good look at the enormous waste of private sector providers, see the folks at Health Care for All - Washington
The podcast link to that hearing is here. The Appropriations Committee does it in other media too. It's great stuff. It is also leadership, figuring out where we need to go and setting about getting there.
I guess I'm behind the curve on this. I didn't realize drugs weren't measured against each other to gauge effectiveness. They're measured against a placebo. Part of evidence-based medicine ("evidence of effectiveness and benefit") is setting up comparisons between drugs and drugs or drugs and other procedures.
Surgical procedures are analyzed for effectiveness. The gastric bypass, for example, was determined to be effective, but only for the morbidly obese.
Providers are judged, too. If one clinic has a significantly higher success rate than another, why are we not funneling state business to that clinic?
What makes most sense is having independent analysts examine the material, the studies. People without a horse in the race judging providers, discounting biased trials and phony findings. They're doing this at the Oregon Health and Sciences University. John Santa from that school's Center for Evidence Based Policy was there to testify.
While Kitzhaber has said, "It's too late for incremental change," a good first step is getting state capacity in this area. State Health Care Authority administrator Steve Hill estimated 25 to 30 percent of the $4 billion spent on health care annually is wasted (compare to $350 million per year total budget for projects under the 9-cent gas tax). Only a fraction of this waste is in administration, the rest is "overuse, under use, and misuse in health care treatment."
Administrative savings in the health care field can be found aplenty, too. But don't look at government programs. That address is Private Corporate Health Care Insurance Company, Inc. For a good look at the enormous waste of private sector providers, see the folks at Health Care for All - Washington
Tuesday, January 10, 2006
No wonder they chose the color red
"Political business cycle" was a term used to describe the ginning up of the economy just prior to a presidential election. The data in these charts describes another political business cycle.
Subsequently, Ronald Reagan erased the memory of the most desperate recession in postwar history (1981) with some good economic news in 1983-84. Never mind the debt we are still paying off. George Bush I did not get the response from Alan Greenspan he needed, and thus not the bump he needed.
Jimmy Carter was perhaps the worst player, since he backed off expansionary policies out of fears for inflation, suffered a slowdown in the last year of his first term, and did not see a second. Clinton was surely aware of the phenomenon. He didn't need to do much but crow in 1996, but in 2000, he made a calculated and unprecedented move to release stockpiles from the strategic petroleum reserve to cut energy prices in the year running up to the election. I still think if Gore had run on the economy, he would have won, instead of running on ... morals? Well, whatever he ran on.
The following charts have nothing to do with that. These simply describe the behavior of GDP and budget under the administration of the two parties. "Net GDP" is my formulation to show what the economy would have done without the borrowing. GDP is more a function of demand than supply, and when you increase demand by borrowing, GDP loses its usefulness in describing the health of the economy. Nobody is going to say credit cards are the same thing as paychecks.
If you want to get the full discussion, you'll have to buy the book. But this is what happens to GDP when you subtract the borrowing (or add surpluses), including the borrowing from Social Security and other social programs.
Note to W: Borrowing massive amounts of money because you cut taxes on the rich does not lead to economic strength.
Thursday, December 29, 2005
A sad catastrophe is brewing
Thursday, December 29, 2005
The current federal debt is $8.1 trillion. Yes, $8.1 trillion. $8,100,000,000,000. Eight trillion one hundred billion dollars. This is the principle on which we are paying interest every year. See it to the penny at Bureau of the Public Debt.
The on-budget deficit, that is, the amount we are adding to the debt by borrowing from all sources including Social Security trust funds, was $567 billion in 2004. It will be at least $500 billion this year, next year, and every year until a change is made. Half a trillion dollars a year we are borrowing. At 5% interest, four years from now, that half a trillion will only pay debt service. At 10% interest? (Ten percent is conceivable, because who will lend us money with these kinds of books?)
Net interest is currently about one-tenth of federal spending. This is largely a legacy of the policies of Ronald Reagan and the first George Bush. Dubya is making them look like pikers. Inevitably the debt service will be crippling.
The Iraq War, the culture of corruption, the torture and habitual lying, the burning of the Bill of Rights, these are examples of a betrayal of America by the Radical Right under Bush and Cheney. Baffling in their audacity. Magnets for outrage. But the crime that is being committed on our economy.... Unless we all die before we want to, the burden will not fall solely on our children.
Bush and the Republican Congress are poisoning the future. They are playing war with other people's lives and gambling with other people's money. The Right Wing is ensuring the demise of popular (as in "of the people") social programs by these deficits, but the damage will not be confined to the structures we expected to carry us in dignity, but to the whole fabric of the economy.
It's worse than you think. See the Congressional Budget Office projections.
The current federal debt is $8.1 trillion. Yes, $8.1 trillion. $8,100,000,000,000. Eight trillion one hundred billion dollars. This is the principle on which we are paying interest every year. See it to the penny at Bureau of the Public Debt.
The on-budget deficit, that is, the amount we are adding to the debt by borrowing from all sources including Social Security trust funds, was $567 billion in 2004. It will be at least $500 billion this year, next year, and every year until a change is made. Half a trillion dollars a year we are borrowing. At 5% interest, four years from now, that half a trillion will only pay debt service. At 10% interest? (Ten percent is conceivable, because who will lend us money with these kinds of books?)
Net interest is currently about one-tenth of federal spending. This is largely a legacy of the policies of Ronald Reagan and the first George Bush. Dubya is making them look like pikers. Inevitably the debt service will be crippling.
The Iraq War, the culture of corruption, the torture and habitual lying, the burning of the Bill of Rights, these are examples of a betrayal of America by the Radical Right under Bush and Cheney. Baffling in their audacity. Magnets for outrage. But the crime that is being committed on our economy.... Unless we all die before we want to, the burden will not fall solely on our children.
Bush and the Republican Congress are poisoning the future. They are playing war with other people's lives and gambling with other people's money. The Right Wing is ensuring the demise of popular (as in "of the people") social programs by these deficits, but the damage will not be confined to the structures we expected to carry us in dignity, but to the whole fabric of the economy.
It's worse than you think. See the Congressional Budget Office projections.
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