CBO Chief calls the Democrat economic path unsustainable
As the nation marks tax freedom day– the day in which most Americans have earned enough money to pay for federal, state, and local taxes – most are left feeling worried instead of relieved thanks to the Democrats out-of-control spending agenda in Washington.
Adding to the misery is the price tag of the new health care reform package that will dig deeper into American’s pocket book by creating $570 billion in new taxes.
As a result senior Obama officials are now hinting that that a European-style ”value added tax” (VAT) will be needed to meet the increased spending, however many say the new hidden tax will slam consumers and kill jobs.
The already bloated deficit is expected to increase by an eye-popping $2.2 trillion. President Obama’s new massive $3.83 trillion budget proposal for 2011 recklessly borrows 42 cents of every $1 spent by the federal government, according to his financial team.
The non-partisan Congressional Budget Office (CBO) Chief Doug Elmendorf called the Obama Administration’s fiscal path “unsustainable” and stressed that the crisis cannot be solved through “minor tinkering.”
While the financial markets may have rebounded from the big crash during the Bush Administration the country’s unemployment figure is hovering around the 10 percent mark. Obama’s financial wizards have already indicated the elevated unemployment numbers may become the new norm, in the new America.
As Sen. Barbara Boxer (D-CA) readies herself for a tough reelection battle, she is crisscrossing California during the Senate recess touting what she sees as concrete accomplishments of the past year -jobs created by the economic stimulus package, benefits from the healthcare bill for seniors and tax breaks for businesses that are hiring the unemployed. Most in California see the new legislative packages as a drag on the economy, not a positive.
“As our country marks Tax Freedom Day, Californians are feeling anything but relieved thanks to Barbara Boxer and the Washington Democrats who have racked up reckless debts that will be paid for by future generations. Boxer and the Democrats in Congress have taxed, spent and borrowed America into a fiscal crisis, and we’re confident that voters will hold her accountable for this dangerous economic agenda in November,” said National Republican Senatorial Committee (NRSC) spokeswoman Amber Marchand.
When the President took office last year the national debt stood at roughly $10.6 trillion, according to the U.S. Department of the Treasury, Bureau of the Public Debt. However, by early April 2010, the national debt had increased by more than $2 trillion to $12.8 trillion and counting.
The bloated deficit is now threatening the country’s credit rating that in turn could cause interest rates to rise, further hindering an economic rebound and sending the economy into a double-dip recession.
The AAA credit rating is threatened by “mushrooming debt” according to Moody’s and they could downgrade America’s credit standing which would harm the federal government’s ability to borrow money cheaply.
The gold standard agency said the United States and other Western nations have moved ‘substantially’ closer to losing their top ratings, as the credit number reflects their ability to pay back loans.
America has enjoyed high credit standards for more than 50 years and Moody’s said it’s not just U.S. prestige at stake. A downgrade would harm the federal government’s ability to borrow money cheaply,” according to an editorial, “A Ticking Debt Bomb,” in The Philadelphia Inquirer.
“The federal deficit is expected to rise this year to 10.6 percent of gross domestic product, its highest level since 1946.” The fiscal future for America looks even dimmer according to the editorial.
Lower credit ratings translate into reduced services while spending remains the same. The result would leave schools short changed, roads unfixed, borders less secure and higher taxes.
The Columbus Dispatch explained it this way; “The United States isn’t going to default next week or next year, but the previously unthinkable grows nearer with every day the nation fails to change this disastrous course.”
The head of the CBO, Elmendorf, said the costs of the new health care laws could result in dire consequences if political leaders don’t scale back spending or increase taxes.
Elmendorf noted in a recent CBO report that 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 the President’s fiscal 2011 budget were to be implemented as written. As a percentage of gross domestic product, the debt would rise from 53 percent to 90 percent, the CBO forecasted. “The only other time the percentage was that high was right after World War II,” Jonathan Allen reported in Politico.
As America inches closer to a form of Socialism, concerned citizens say for the first time in their lives America’s children will not benefit from a brighter future. The tax revenue needed to sustain the federal government and entitlement programs in place will stagnate the economy indefinitely bringing America in line with European countries.
Curtailing spending is a must if America wishes to return to the days of yore, former President Ronald Reagan said it best; “Socialism only works in two places: Heaven where they don’t need it and hell where they already have it.”
For more stories; http://www.examiner.com/x-10317-San-Diego-County-Political-Buzz-Examine