Venango County Tea Party Patriots

A non-partisan, non-profit, non-member, association dedicated to educating the public and promoting the principles of fiscal responsibility, constitutionally limited government and free market economics, and all other lawful activities.

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CBO Says Financial Crisis Likely

The Congressional Budget Office released its 2013 long-term budget outlook on Tuesday, stating that “a large and continually growing federal debt …would increase the probability of a fiscal crisis for the United States.”

The report says under current laws and policies, the federal debt could reach 100 percent of Gross Domestic Product in 2038.

It also projects that the federal government’s health care spending “will grow considerably in 2014 because of changes made by the Affordable Care Act.”

CBO says federal debt held by the public is now about 73 percent of the economy’s annual output, or gross domestic product. “That percentage is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percentage at the end of 2007,” the report said.

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Still Headed Towards a Fiscal Cliff

Obama lately has acted as though most of the work has already been done to get the debt problem under control. At a recent press conference, he claimed that he’s already cut long-term deficits by $2.5 trillion and that “closing some additional loopholes (and) doing some additional cuts” are all that’s needed to cross the finish line.

But the latest CBO report shows that the country is far from out of the woods. In fact, despite the supposed budget cuts and the $620 billion in tax hikes Obama brags about, deficits start climbing every year after 2015, reaching back up to $978 billion by 2023.

Debt, too, starts expanding again as a share of GDP, climbing to 77% by 2023, with no end in sight.

Even that grim outlook is unrealistic. The CBO’s forecast assumes, for example, that Congress will let scheduled huge cuts in Medicare payments to doctors go through, even though they haven’t done so for years.

It assumes ObamaCare’s costs don’t explode, despite increasing evidence to the contrary. And it assumes there’s no recession anytime in the next decade and that interest rates remain reasonably low.

The CBO also makes it abundantly clear that the cause of this crisis is out-of-control spending, not insufficient tax revenues.

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US Debt Headed to 200 Percent of GDP

The nation’s long-term fiscal outlook hasn’t significantly improved following the recent agreement between Congress and the White House over tax and spending issues, according to a new analysis.

The “fiscal cliff” deal, combined with the debt-limit agreement of August 2011, only slightly delays the United States reaching debt-to-gross domestic product levels that would damage the economy and risk another fiscal crisis, according to a report from the Peter G. Peterson Foundation released on Tuesday.

The agreement “may have prevented the immediate threats that the fiscal cliff posed to our fragile economic recovery, but we haven’t remotely fixed the nation’s debt problem,” said Michael A. Peterson, president and COO of the Peterson Foundation.

“The primary goal of any sustainable fiscal policy is to stabilize the debt as a share of the economy and put it on a downward path, and yet our nation is still heading toward debt levels of 200 percent of GDP and beyond,” he said.

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