The distributor noticed that the previous bill hadn't been paid and was several months past due. The collections manager left a voice-mail for the customer saying, "We can't ship your new order until you pay for the last one."
The next day the collections manager received a collect phone call, "Please cancel the order. We can't wait that long."
This appears to be the business plan of the Congressional Budget Office. I was worried about having a Democratic President while the Democratic Party controls Congress as well. One of my biggest fears was that government spending would get out of control and it seems that fear is turning to reality.
So many people criticized the Bush Administration for running $150-400 billion annual budget deficits. While I do think things could have been run better those deficits could be managable with proper planning during better economic conditions. The new estimates coming from the CBO would double the national debt from $6.7 to $17 trillion by the year 2019.
Short term deficits are to be expected. The current Administration inherited an economic and financial mess of epic proportions. Without Obama's policies this year's deficit would have been around $1.2 trillion. However, the current deficit projections are double what the Bush Administration's stimilus plans would have spent for the next two years.
All of this overspending in the next couple of years is scary, but most economists have accepted it as the lesser evil for the current problems we are facing. What gets really terrifying is the continued deficit projections over the next 10 years. I pulled these graphs from the Thredgold report from April 1, 2009.
You can see that the outlook is very grim. If this is the way things really pan out, I have no idea how we will ever even make a dent in paying off our national debt. We as a nation must figure out a way to become fiscally solvent. We must stop passing the buck to future generations because someday the bill will come due. Let's get this under control before the dollar is worth nothing and we become the United States of China.
4 comments:
Whose idea was it to go into debt in the first place? Crazies!
Those graphs bring up some interesting points. I think the budget graphs are misleading for two reasons. First, these figures only account for "budgeted" figures which are not in line with the actual totals. Although Bush's budgets included deficits between 100-400 billion the actual deficits were between 144.5 and 605.0 billion up until the last completed fiscal spending year. A major portion of the discrepancy is because the wars in Iraq and Afghanistan were not included in the proposed budgets and were only financed through emergency spending bills.
Secondly, the first highlighted projected year is our current fiscal year which was budgeted and passed under Bush. So, the massive deficit increase which we will have this fiscal year has nothing to do with the current administration. It was fixed no matter who won in November. Furthermore, the projected deficit for this fiscal year is 962.0 billion which as you said isn't a lot to work with.
Obama has an incredible challenge before him. I just hope that he will be able to achieve the same result as Clinton did by cutting the deficit and achieving a surplus for the first time in recent memory. (I'm not a Clinton fan but I have to give him credit for that.)
No matter how it pans out I think we are going to be paying a lot of taxes for a long long time.
Jesse,
You bring up some good points but there are a couple of points you might consider. First, the graphs I used aren't meant to show the exact deficit but are a comparison of budget policy. I realize that the actual deficits in the past don't exactly match the budgeted amounts, obviously because they never do. That worries me even more because Obama has already shown an affinity to spend more than budgeted.
That brings me to the next point. You pointed out that the first projected year was from the Bush Administration's budget, however in the third paragraph of my post I explained that under Bush's budget the deficit for the year would have been about half what it is projected to be now. The stimulus packages that Obama has passed are a large part of the projected deficits over the next couple of years.
I'm not trying to blame Obama for this mess, it was inherited by him. I'm just trying to express concern with the trend our nation is entering in obtaining a level of debt that no one seems to see a way of overcoming. I too would love to see Obama achieve a budget surplus but given the current economic situation and projected costs of his new plans, I give that a snowball's chance in a very hot place.
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