By Greg Campbell
As President Obama continues to assert that the scheduled sequester cuts are not his idea, but the fault of the Republicans, Americans are beginning to question the White House’s narrative on how they intend to fix the economy- a task Obama pledged to do in his first term.
While America waits to see some economic progress, the Government Accountability Office released a report in January, confirming what many economic conservatives have already claimed- that President Obama’s economic policies are not sustainable.
•’The projections in this Report indicate that current policy is not sustainable… Preventing the debt-to-GDP ratio from rising over the next 75 years is estimated to require some combination of spending reductions and revenue increases that amount to 2.7 percent of GDP over the period.’
• ‘It is estimated that running primary surpluses that average 1.0 percent of GDP over the next 75 years would result in the 2087 debt-to-GDP ratio equaling its level in fiscal year 2012, which compares with primary deficits that average 1.7 percent of GDP under current policies.’
•’It is noteworthy that preventing the debt-to-GDP ratio from rising over the next 75 years requires that primary surpluses be substantially positive on average. This is true because projected GDP growth is on average smaller than the projected government borrowing rate over the next 75 years.’
•’If the primary surplus was precisely zero in every year, then debt would grow at the rate of interest in every year, which would be faster than GDP growth.’
•’The differences between the primary surplus boost starting in 2023 and 2033 (3.2 and 4.1 percent of GDP, respectively) and the primary surplus boost starting in 2012 (2.7 percent of GDP) is a measure of the additional burden policy delay would impose on future generations. Future generations are harmed by a policy delay of this sort, because the higher the primary surplus is during their lifetimes the greater the difference is between the taxes they pay and the programmatic spending from which they benefit.’
While President Obama and his media allies boast from their ivory towers that America ‘doesn’t have a spending problem’ but rather a ‘health-care problem,’ they are sweeping reality under the rug and spouting lies to the American people.
This is the reality: when President Obama’s personal auditor says the federal government has a spending problem, it indeed has a spending problem—and one that is growing rapidly.”
Most upsetting about the report is not that America is running a deficit with no serious discussion of how to cut down on spending, it’s the candid revelation that even with a balanced budget, the astonishing amount of debt America has means that we must run consist surpluses to pay even pay off the interest on the loans. And with America having accrued so much debt so quickly, it is likely that our economic model will be seen as unstable by potential lenders, so borrowing money to be able to make the payments on the interest on our debt will likely be out of the question in the near future.
While Obama and his fellow Democrats posture and bluster over the comparatively-measly 1.2% cuts to total deficits, they have conveniently ignored the $16.5 trillion debt, the annual trillion-dollar deficits, the $223 billion annual interest on our debt and this governmental report that clearly calls Obama’s failed economic polices unsustainable.