It's the Economy, Stupid!

The Washington Post recently published an editorial titled The Debt Tsunami. The author (unknown) describes the “tough” job of the Congressional Budget Office, or CBO, as that of providing a ”reality check” to the country’s lawmakers. The image I believe the author is trying to evoke in his audience, who should be every U.S. citizen that is afraid of increased taxes, a weak U.S. dollar and a falling standard of living, is that of the little boy with his finger in the dike trying to stem the ever increasing flow with no one coming to help.

I agree that the congressional Democrats and President Obama don’t want to hear that the fiscal policy of the country is unsustainable if this growth of our nation’s debt goes unchecked. They know the only way to stop the inevitable is through tax increases, spending cuts or both. Approval of President Obama’s handling of health care has slid from 57% to 49% since April, according to a Washington Post-ABC News poll, yet the President is pushing his health care reform harder than ever. I believe that the majority of the people are coming to realize that sometimes, even the government must say “We can’t afford it”! In March, only 32% of Americans thought President Obama was an old-style, tax-and-spend liberal. Now 43% do!

The author sights the CBO’s long-term forecast which predicts that the publicly held debt of the U.S. government will roughly double from approximately 41% of GDP in 2008 to 82% of GDP by 2019. I agree that his statement that this amount of debt would stifle economic growth and reduce the standard of living in our country. The CBO says the principal cause of our long-term fiscal distress is primarily due to the ageing of the U.S. population, coupled with rising health-care costs which will drive spending on Medicare and Medicaid from almost 5% of GDP today to almost 10% of GDP by 2035.

The author summarizes that President Obama, like his predecessors, is aware of this issue, and like them has promised a plan to deal with it but has of yet come up with a credible solution. Like Mr. Obama said during his campaign for your vote, “It is time for that to change”.