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When President Clinton declared 'the era of big government is over" in 1996, the federal budget of the United States Of America was $1.56 trillion. A mere fifteen years later, President Obama has announced a $3.83 trillion budget for 2011. I don't think I'm alone in saying the rumors of the death of big government were greatly exaggerated. The increase in spending alone since 1996 ($2.3 trillion) is substantially more than the entire federal budget was in 1996. It's no surprise that federal revenue has not been able to keep up with this spending explosion, and even if it had, imagine the effect that would have had on our economy. Imagine the economy as it is now, but with the federal tax burden DOUBLE what it is currently. Nightmarish.
It's not like GDP increases justify this spending boom either. In 1996, the GDP was $7.762 trillion. Now, it's $14.4 trillion. Our GDP has increased by 85% while our federal spending has increased by 145% over the same period. If our federal spending was in line with GDP, the federal budget should be around $2.88 trillion now, but it's a trillion dollars higher. We've managed to increase spending by a trillion dollars per year above GDP. That's a trillion per year that comes out of the private sector, a trillion per year more that comes out of the taxpayers pockets.
But we don't pay for all these enormous federal spending increases, as bad as that would be for the economy. No, what we do is even worse. We deficit spend and run up the federal debt. We borrow or print the money. The reason this is worse is because when we run up the debt, we are not only indebting future taxpayers for our irresponsibility, but they also have to pay interest on the debt. We pay hundreds of billions of dollars in interest on the debt now, and it we keep on the trajectory we're heading, as it appears we will judging from the latest numbers coming out, by 2019 we would be paying more than $700 billion per year in interest on the debt alone. To put this in perspective, our entire defense budget now is about $644 billion. That $700 billion in interest on the debt would be money flushed down the toilet, of no use to any American.
And now for the bad news. As bad as our economic prospects are already, we have an economic time bomb getting ready to detonate very soon. That bomb is known as the baby boom generation, the largest group of citizens in America. The baby boomers will begin to retire next year, and by the end of this decade, most of them will be out of the workforce. This will have a number of effects on our economy. First of all, consider that much of the economic growth from the mid-1980's until now has come due to the boomers. They entered the workforce, started earning money, and started SPENDING money, leading to economic growth. As the peak earning years of the boomers starts to wane, they will do LESS SPENDING, resulting in less economic growth. Remember, 70-80% of our economy is based upon consumer spending. That spending will start dropping very soon, as the boomers move into retirement. Secondly, just as the boomers leave the workforce, move into retirement, and start spending less money, thereby inhibiting economic growth, they will start putting an enormous demand on Social Security and Medicare, the two entitlement programs that represent the majority of our federal budget.
And guess what ? We aren't prepared to pay those boomers. We have an estimated $55 trillion in unfunded entitlement liabilities on top of our $12.3 trillion current debt, a debt that is projected to reach $21 trillion or so by 2019. There is no money in the mythical Social Security Trust Fund (Congress stole it), and Medicare is on a definite path to bankruptcy, in far worse shape than Social Security.
So, what does it all mean ?
It means we are headed for the perfect economic storm, one that will surely bankrupt our country. We are facing nothing less than an economic tsunami, while our distinguished Congresspersons watch it come, doing nothing. Even worse than doing nothing, they are actively making things worse by ramping up federal spending, deficits, and debt at a rate unprecedented in the history of our country. Congress and the White House have gone beyond irresponsibility. This level of depraved indifference to the economic situation America is facing should be a crime, a very serious crime. And I'm not talking about just Democrats or just Republicans here. It's both parties. Almost all of them are complicit in this criminal negligence.
Think about this - we live in the wealthiest country in the history of the world, yet our federal government has never been able to balance the budget in my entire lifetime. That debt has accumulated and accumulated ever since I was born, and I'm 56 years old. It seems to get progressively worse as each year passes. It's absolutely unconscionable.
The federal government is leading us off the brink into the abyss, and I'm so fed up with it that the words I'm writing here can barely express it. I could care less if Obama says he's' "not an ideologue," or if he complains that he's being "demonized" by the Republicans. So what ? Who gives a flip ? He SHOULD be demonized, as should be every other politician of either party who is part and parcel of this problem, as Obama certainly is. Bush was a part of it too. Democrats, Republicans, I'm sick of them all (although slightly more sick of the Dems and their big government bs, which is the essence of the problem). If I hear one more big spending, big government moron talk about being "compassionate" as they spend us into oblivion, I'm going to turn into Howard Beale from the movie Network and start screaming "I'm mad as hell, and I'm not going to take it anymore !' out my window. I don't want to hear Obama blame it all on Bush, and I don't even want to hear the Republicans blame it all on Obama. That's useless political puffery. It's meaningless. What we need are some SOLUTIONS, even if they are painful in the short term, because if we don't come up with them, all of us are going to suffer far more down the road. What I don't want to hear is what I just heard from our President - trifling nods toward fiscal responsibility while he massively increases spending and deficits more and more and more. That is phony political posturing, which solves nothing. We've had enough of that already.
Arrrrrggghhhhh ! No wonder people take Xanax.
P.S. - As bleak as our future is, allow me to point out one bright spot before we all go out and hang ourselves. Here it is - we don't have a long-term unemployment problem. As the boomers retire, starting next year, all kinds of jobs are going to open up for younger workers. In fact, our problem will soon become that we don't have enough workers to fill all the available jobs. The demographics should insure it. So, all you young workers, take heart. You will have jobs...but how you're going to pay all the taxes that my stupid generation is leaving for you is another matter. On behalf of my stupid generation, I sincerely apologize. I never supported the stupid policies of my stupid and greedy generation. I wish all you young people the best of luck. You'll need it to get through the Great Recession ahead.