By Bill Wilson
Call it the looting of America.
This week, while Congress was busy debating trillion-dollar government takeovers of the financial, health care, and energy industries, Moody’s Investor Services issued a stark warning that U.S. “public finances are deteriorating considerably and may therefore test the Aaa boundaries…”
Who can blame them? According to Bloomberg News, citing the Organization of Economic Cooperation and Development, “The U.S.’s debt burden will climb to 97.5 percent of gross domestic product next year from 87.4 percent.” And it will reach the 100 percent mark in 2011.
Today, the national debt stands at over $12 trillion; money that has been borrowed from overseas, largely, represents a transfer of wealth from future generations to pay for collapsing entitlement programs today. Once interest rates start climbing, debt service payments by the U.S. will become intractable.
According to the New York Times, “the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically.”
And, even as interest repayments grow exponentially, the debt will not shrink. In fact, the national debt has grown every single year since 1958. And the government projects that trend will continue unabated for the next decade.
It is against that dark and dismal backdrop that:
- Timothy Geithner yesterday stated that the Troubled Asset Relief Program (TARP) is being extended by the Department of Treasury through October 2010. The proclamation came just days after it was announced that the loan program would simultaneously be raided to bail out bankrupt states like California and New York in a plan that could cost as much as $200 billion.
- Barack Obama traveled to Copenhagen, Denmark, to negotiate a draconian treaty capping carbon energy emissions in the industrialized world, and transferring some $100 billion in wealth annually to the developing world.
- According to the Wall Street Journal, “Clause after complicated clause of the draft treaty requires developed countries to pay an ‘adaptation debt’ to developing countries to supposedly support climate change mitigation. Clause 33 on page 39 says that ‘by 2020 the scale of financial flows to support adaptation in developing countries must be [at least $67 billion] or [in the range of $70 billion to $140 billion per year].’”
- The Senate attempted to put the finishing touches on its $2.5 trillion government-run takeover of the nation’s health care system. According to an Americans for Limited Government analysis of Congressional Budget Office data, by 2019, the “public option” will have spent some $361 billion more than it takes in via new taxes.
- According to the AP, Congress is prepared to pass a $1.1 trillion spending bill that will include “a huge increase in foreign aid with an 18 percent cut to a program that helps states with the cost of incarcerating criminal illegal immigrants.” It would also increase housing and heating subsidies, and “All told, the measure blends $447 billion for the daily operating budgets of the nine Cabinet departments with more than $600 billion for benefits such as Medicare and Medicaid.”
This year, the U.S. had an historic $1.42 trillion budget deficit. And according to the Examiner.com’s Dave Gibson, “We are now on track to break that record within the first three months of 2010.”
All of which leaves little wonder as to why Moody’s has such a grim assessment of the nation’s fiscal outlook.
Compare that with Barack Obama’s assessment of the nation’s public finances, speaking at the Brookings Institution two days ago: “We can safely say that we are no longer facing the potential collapse of our financial system and we’ve avoided the depression many feared. Our economy is growing for the first time in a year, and the swing from contraction to expansion since the beginning of the year is the largest in nearly three decades.”
He even had the gall to suggest that his proposed deficit-spending would result in reducing deficits, “Ensuring that economic growth and job creation are strong and sustained is critical to ensuring that we are increasing revenues and decreasing spending on things like unemployment insurance so that our deficits will start coming down.”
Actually, his “spend-our-way-to-riches” shell game will just result in more government borrowing, printing, and profligacy to finance the ever-growing “needs” of an out-of-control government. He is willfully ordaining an unsustainable culture in Washington that can only be called the looting of America.
The joker is wild, and soon, there will be no turning back to fiscal sanity.
Bill Wilson is the President of Americans for Limited Government.
