2012: Our National Fiscal Armageddon?
March 21, 2011
The 2012 presidential and congressional elections are shaping up to be a referendum on whether the American people have the wisdom, the discipline and the will to save this nation.
The nation is on an unsustainable path to fiscal bankruptcy, whose leading long-term drivers are Medicare, Medicaid and Social Security. Yet at every turn, Democrats have obstructed reform with vicious, demagogic attacks on those genuinely trying to reform them.
George W. Bush deserves some credit for trying to propose reforms, but he was immediately savaged by scaremongers who claimed he was going after seniors and proposing a risky solution, mainly because his plan included a small privatization component.
But times have changed. We are at the proverbial crossroads. After two years of President Obama’s reckless stewardship, this nation is in dire straits, and people are more informed and more alarmed. Also, new stars, such as Rep. Paul Ryan, have arisen to confront these challenges with the powerful arsenal of real facts and figures and the demeanor to command bipartisan credibility — for now.
I say “for now” because it is a virtual certainty that Ryan won’t enjoy any semblance of respect from Democrats once he formally unveils his plan to move the budget back toward sanity.
This is despite the fact, nay, related to the fact that Obama’s approach to the fiscal nightmare has been cynical, tragic farce. His self-description as being fiscally responsible is as insulting as his actual policies are horrifying.
Sen. Jeff Sessions illustrated the wide gulf between Obama’s claims and the reality when grilling Heather Higginbottom, Obama’s nominee for deputy director of the Office of Management and Budget, during a Senate Budget Committee hearing. Sessions forced her into admitting that Obama’s budget definitely would, contrary to his claims, add to the national debt. Of course, a mere cursory review of Obama’s numbers also makes that clear, whether or not Obama’s lackeys own up to the distortions.
But can you imagine how much worse it would be if Obama were to end up getting his way on cap and trade, further “stimulus” proposals and Obamacare? The Congressional Budget Office has already exposed how misleading the Obamacare projections were, and the administration’s obscene thousand-plus waivers from its onerous provisions further reveal the unfeasibility of the plan.
In unveiling his 10-year budget proposal, Obama looked the American people in the face and told us he was bringing the budget under control, even as the hard figures he was presenting promised monstrous deficits that would only slightly decline in the middle years and explode again toward the end.
But that’s not the worst of it. The CBO has since shown that Obama grossly understated his already abysmal projections. It reported that Obama’s cumulative deficits over the next decade would be $2.3 trillion higher than Obama’s projections and that the debt would increase $1.8 trillion more than the administration predicted. Under Obama’s budget, federal spending would be at record postwar levels and would never fall below 23 percent of gross domestic product. The annual deficits would average $1 trillion. Yet Obama tells us he’s not going to be adding to the debt. Not “deficit,” but “debt,” which means he’d have to average a balanced budget from here on out. Does he think we can’t speak English or add and subtract?
After adding astronomically to the debt with his failed stimulus program, locking in higher levels of spending through many federal programs, and reversing welfare reform, he is turning a blind eye to the entitlement crisis.
Obama’s fiscal road map is to continue increasing discretionary spending, to persist in fiscal policies destined to retard economic growth and thus reduce federal revenues, and to be utterly AWOL on entitlement reform. This, knowing that even if he employed a pure libertarian approach of fiscal austerity to the discretionary budget, the entitlements would swallow our budget and bankrupt us within the next generation. The numbers are indisputable.
Rep. Ryan, on the other hand, is on the verge of laying out his bona fide road map to long-term fiscal viability, which consists of: instituting true entitlement reform while making no changes to the benefits for those in or near retirement; improving the health and retirement safety net; real and lasting cuts to discretionary spending; and adopting policies that stimulate, rather than suppress, economic growth, which is an integral part of the budgetary equation.
I intend to get into more detail in future columns about the specifics of Ryan’s plan and how Obama’s policies have dramatically exacerbated our budgetary crisis. But for now, be aware that if you think you’ve seen demagoguery before, just wait until Ryan unfolds his road map.
If we don’t decisively win this war — whose pivotal battlefield will be the 2012 elections — we will have to start looking at financial doomsday scenarios.