180 degrees wrong
Counting intragovernmental obligations amounts owed back to the government by certain government funds total federal obligations now exceed $11 trillion. The federal government borrows nearly half of every dollar it spends.
All things considered, the accelerating overspending that characterized the last days of President Bush and which gave way to the spending-on-steroids appetite of these early days of Obama, are child's play when seen in the light of a much bigger financial storm descending on America, brewed by the bad decisions of previous political generations that America's chief executive and Congress are now totally unwilling to confront.
As of 2008, Social Security's unfunded liabilities stood at $13.6 trillion. Medicare's unfunded liabilities are more than $30 trillion. Medicaid, another severely underfunded and politically untouchable entitlement program, only adds to the total. The federal government's current entitlement bill, including future obligations-based only on promises it has made in the past is greater than $57 trillion.
When the first Baby Boomers started drawing early retirement benefits from Social Security last year, they represented only the ripple before the tsunami. John C. Goodman, president of the National Center for Policy Analysis, pointed this out three months ago at the Hillsdale College National Leadership Seminar. (His remarks were printed in the journal Imprimis, a publication of Hillsdale College. Imprimis, available for free at www.hillsdale.org, belongs on every citizen's reading list.)
"All told," says Goodman, "78 million people are going to stop working, stop paying taxes, stop paying into retirement programs, and start drawing benefits. The problem is, neither Social Security nor Medicare is ready for them. The federal government has made explicit and implicit promises to millions of people, but has put no money aside in order to keep those promises."
Goodman's analysis is like a trailer for an economic horror flick of epic proportions. Consider this foreshadowing: "A recent forecast by the Congressional Budget Office an economic forecasting agency that is controlled by the Democrats in Congress, not by some conservative private sector outfit shows that Medicare and Medicaid alone are going to crowd out everything else the federal government is doing by mid-century. And that means everything-national defense, energy, education, the whole works. We'll only have health care."
But this is before the current, daily, ongoing government takeover of the finance, auto, healthcare, and energy industries being led by President Obama. This is before the volumes of new federal regulations that will be written to accompany the newly extended tentacles of government economic control. This is before the mountains of litigation that will be unleashed to interpret these regulations to maximize the "take" on behalf of countless plaintiffs encouraged by the trial bar to "get their fair share."
Remember Obama's promise to reduce taxes for 95 percent of Americans? Forget it. By mid-century, according to the National Center for Policy Analysis, a middle income American family will need to pay two-thirds of its income to the federal government to fund the level of services we've become accustomed to today. In current budget arguments on Capitol Hill, even Democrats have already argued for letting Obama's hallmark "95 percent of Americans" tax promise expire next year.
Even before President Bush's expansion of Medicare via the prescription drug benefit and his office exit, $700 billion in bailout funds and Obama's opening act of massive federal takeovers of private industry and the mortgage market, America's economy was headed into a future of unfunded entitlement oblivion.
Government of, by, and for entitlement will drive America's economy to the brink. There is no way out of this mess except to incentivize enterprise, entrepreneurial freedom and individual reward. There is no remedy except to encourage the free movement and accumulation of capital on the part of free people-the very dynamics of prosperity that are being actively opposed by President Obama, and technically outlawed by the Democratic leadership in Congress.
Before long, if Obama's stated economic intentions are fulfilled, nearly half of all Americans will be removed from the federal income tax rolls, leaving the "rich" to pay for all federal obligations. But there won't be nearly enough "rich" taxpayers to do this. Whether we recognize it yet or not, Americans are being forced to choose sides between economic freedom and slavery.
Which side are you on?
Matt Kinnaman of Lee is a former Republican candidate for Congress.
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