"... U.S. fiscal policy is on an unsustainable path to an extent that it cannot be solved by minor tinkering."
- CBO Director Doug Elmendorf, Testimony before House Committee on the Budget 1/27/2010
On April 8, 2010, CBO Director Doug Elmendorf sat down with reporters to discuss, among other things, the nation's unsustainable fiscal path. Here are some of those excerpts:
" ... a recent CBO report that pegged an increase in the public debt from $7.5 trillion at the end of 2009 to $20.3 trillion at the end of 2020 if President Barack Obama's fiscal 2011 budget were to be implemented as written."
In January 2009, before President Obama took office, CBO estimated that public debt would never exceed $10 trillion over the 10 year period. After a little more than a year in office, the policies of the President and the Democratic Majority have exacerbated that number by more than 117 percent.
"...Social Security, Medicare, and Medicaid - and defense spending... In 1970, entitlement outlays were 3.8 percent of GDP versus 8.2 percent in 2007. During that same period, defense spending fell from 8.1 to 3.9 percent of GDP."
Between 1970 and 2007, major entitlement spending increased by 4.4 percent to 8.1 percent of the economy. In the next 37 years, in 2047, major entitlement spending is estimated to increase to 21.1 percent - enough to consume more than all federal government spending.
"In essence, the US paid for substantial growth in entitlement spending by reducing military spending as a share of GDP. But going forward, that cannot be repeated. The resources are not there."
Since 2001, the combined cost of operations in both Afghanistan and Iraq will be slightly over $1 trillion. This 10 year cost is equivalent to only 76 percent of the single year 2009 deficit of $1.4 trillion. Spending on Social Security, Medicare, and Medicaid is expected to cost $1.5 trillion in this fiscal year alone.
Source: Politico, Christian Science Monitor