Friday, July 30, 2010

CBO Issues Warning: Too Much Debt is Baaaaaad!

Notice how the folks in the media always go to pains to say the "bi-partisan Congressional Budget Office?"  Remember when they were "scoring" the healthcare "reform" act so that the pro-bill nimrods could tout that it was "budget neutral?" All of that, by the way, is hogwash - a) the estimates turned out to be completely wrong and in the best case that monstrosity will cost us well over $1.5 Trillion  AND b)  the bill(s) that Congress is passing are purposefully vague.  All they are doing is setting up bureaucracies  that will then write the rules...more cause for the continued unsettled state of our economy. AND c) the law of unintended consequences when you meddle with something that large and intertwined with all other segments of the economy. Case in point, Rumblerpal who works for a healthcare REIT informing me that they are encountering difficulties with medical office buildings because 1) Docs are quitting their practices - they don't want to deal with the case load and 2) Credit worthiness of the doc offices is declining due to lower Medicare and Medicaid reimbursement rates - look for some consolidation there.

Well the same reliable group, our good old CBO has issued a new warning:  too much government debt is bad.  Here's the chart:

See the nice, dare I say "hockey stick" on the purple line?  That's Obama and the Democrat Congress ruining our children's lives.  The green dashes?  How much more our children's and grandchildren's lives will be ruined if the current trend continues.  They note (in a paragraph that could have come straight from the Republican Party platform):
Further increases in federal debt relative to the nation’s output (gross domestic product, or GDP) almost certainly lie ahead if current policies remain in place. The aging of the population and rising costs for health care will push federal spending, measured as a percentage of GDP, well above the levels experienced in recent decades. Unless policymakers restrain the growth of spending, increase revenues significantly as a share of GDP, or adopt some combination of those two approaches, growing budget deficits will cause debt to rise to unsupportable levels.
I'm sorry, what have we been screaming about in these pages for the last few years?  What were we preaching as all the new taxes and entitlements were scheming their way through Congress?  Unsustainable?  Can you say "Argentina?"

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