Budget Time: Still Broke
Oh goody, Bama's new budget proposal is out. Last years budget was only off by $226 billion which I have to admit is pretty good. For our government it is a mere rounding error. It also happens to be almost the exact size of the net worth of the 7 richest people in America. So we can simply seize 100% of the assets of Bill Gates, Warren Buffett, Larry Ellison, Charles Koch, David Koch, Christy Walton and George Soros and it will turn out that the prediction of a mere $1.1 trillion deficit would have been right on.
The new budget calls for $3.803 trillion in spending ($12,200 for every citizen, including infants so I would say that if you pay less than $12,200 in taxes this year you are not paying your "fair share".) Only 3 countries have a gdp higher than $3.8 trillion- Japan, China and the US. And it proposes we run a deficit of $900 billion, mostly due to tax increases and growing economy bringing in an estimated $433 billion more in revenue than last year.
Last years proposed budget projected we would only run a $768 billion deficit for FY2013 but hey, rounding error. (For those interested in the historical accuracy of these long term predictions, the 2010 budget proposal estimated our FY2012 deficit would be $828 billion- it will be closer to $1.3 trillion but hey, rounding error)
So what is the bottom line? Like usual I will pretend that the CBO's estimations are based in reality even though I find the idea that we are going to be experiencing 4.5%-5% GDP growth in the near future and for the next few decades highly unlikely. I also have a hard time imagining the government only raising spending a couple hundred billion a year. But I'll live in fantasy land for a moment.
Assuming everything happens exactly as Bama claims it should and the CBO's optimism is correct we will add "only" $10.124 trillion to our debt over the next ten years. Add to the estimated $16.3 trillion debt at the end of 2012, we will owe approximately $26.4 trillion. The interesting thing about this budget is the 10 year projections also happen to end the year that the Medicare trust fund is projected to be bankrupt. So in addition to dealing with the $26.4 trillion in debt (around $800 billion in interest spending alone) our general funds will have to start picking up the tab for Medicare and within another 10 years for Social Security as well. I don't think you need to be an economist to realize that is going to be a big problem.
10 years isn't that far into the future but our elected officials are doing nothing. The are arguing over a fucking tiny $100 billion payroll tax cut while real financial problems face our country. Don't think I'm picking on Bama, there is plenty of blame to go around and no person in office (or running for office) has even proposed a realistic solution. I don't know if it is a case of normalcy bias or if everyone in office is crooked, but if you are someone who is going to be royally screwed when the government runs out of money I suggest you take steps to protect yourself because I don't see how our government going broke is anything other than a question of when and that when looks like it will happen in the next 20-30 years at best.