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  • Morning Bell: Pictures of America's Fiscal Nightmare

    There’s urgency in Washington to fix a problem that’s been a long time coming: America’s fast track to fiscal implosion. In The Heritage Foundation’s just-released, expanded 2011 Budget Chart Book, you can see just how bad the country’s spending problem is and how America racked up so much debt.

    Congress is coming to grips with the need to enact reform, in part because there’s a new breed of Tea Party conservatives making their voices heard on Capitol Hill and also because the government has reached the legal limit on how much it can borrow. The Washington Post reports this morning that it’s crunch time in Washington, with legislators and the White House working to find a way to cut $2 trillion from the federal budget by 2021.

    Now is indeed the time for them to take action. In roughly 20 years, the typical American’s share of the national debt will more than triple unless Washington gets the nation’s fiscal house in order. Right now, the national debt averages $31,871 for each American—nearly two-thirds of the median household income of $50,255. The Heritage Budget Chart Book illustrates that without any real spending cuts or reforms, debt will surge to $103,827 per American by 2032 and keep rising.

    “For younger generations, the story gets worse,” says Alison Acosta Fraser, director of Heritage’s Thomas A. Roe Institute for Economic Policy Studies. “By 2044, each American’s share of the national debt will redouble to $206,771. And it keeps going up after that.”

    The expanded version of the Heritage Budget Chart Book contains 42 graphics that portray Washington’s unprecedented levels of spending, deficits and debt. Seven brand new graphics have been added since a 2011 preview edition of the chart book was released in April.

    One chart compares President Obama’s 2012 budget with the Heritage plan to fix the debt and cut spending, “Saving the American Dream.” Under the President’s budget, net interest spending on the nation’s debt would more than triple in the next decade. But the Heritage plan balances the budget in 10 years and dramatically reduce the debt to 30 percent of GDP by 2035.

    “What comes through strikingly in these graphics is that Washington has a spending problem that must be corrected,” Fraser says, noting that entitlement programs continue to be the main driver of increased federal spending. For example, an updated chart shows how a lack of entitlement reform pushes spending to engulf half of the economy by 2056.

    Richard Fisher, president of the Federal Reserve Bank of Dallas, warns of the damage that continued unchecked spending will have on America’s future:

    Under both Republican and Democratic leadership, past Congresses have created a fiscal sinkhole that is so deep and so wide, it threatens to swallow up our prosperity and render our economy an abattoir. They have forsaken the most sacred responsibility they have to successor generations of Americans: Instead of passing the torch to our children, they have passed them the bill.

    But one need not peer into tomorrow to see the effects that rampant government spending can have on a nation’s economy. Greece is in the midst of a continuing fiscal crisis brought about by years of irresponsible spending—and its woes are impacting world markets among fears of the country’s possible default.

    The United States, too, stands at the brink. And as the 2011 Budget Chart Book compellingly shows, short-term fixes won’t solve America’s problems. Unless Congress and the White House address the root of the country’s spending problems—entitlement spending—it will remain on a path to ruin.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    19 Responses to Morning Bell: Pictures of America's Fiscal Nightmare

    1. northerner says:

      Sadly true. There will have to be a host of honest Congressmen and Women with the gonads to step up and make the hard decisions to stop this runaway freight train of debt. The responsibility lies directly with my fellow "boomers". Our irresponsibility and "if it feels good, do it" philosophy have landed us where we are. The solution is not pretty. Check this link: http://barnhardt.biz/index.cfm for a viewpoint. Hard hitting and in your face. But she may have the only solution. That, really, most of us if we are honest, we knew for years was coming, sooner or later. Sooner is here.

    2. RedBaker says:

      Don't tell me how much Congress is going to cut. Tell us the the net product – how much will they continue to borrow? Even the Ryan Plan takes its sweet time in balancing, if it ever happens. Timid.

      Conservatives must demand:
      1. A balanced budget ironclad commitment – a Constitutional Amendment.
      2. Reach balance in a short time (4 years or less)
      3. Cut federal spending back to no more than 18% of GDP.
      4. Slash the cost of federal regulations from 12% of GDP to no more than 4% of GDP.
      5. Slash the complexity and loopholes out of our obscene tax code

      Congress is not to be trusted any longer. They have put this republic in great danger.

      Since federal spending is now 25% of GDP, we ought to start cutting federal spending by 1.5% of GDP per year, or $225 billion, each and every year for 4 years, to bring down the pork and boost up the private sector. Since large cuts in government spending will lower GDP if done in isolation, we need to offset that reduction by slashing those programs which deliberately damage our economy. Examples: ethanol, energy restrictions, subsidies, green technology installations, banking regulations, Sarbanes-Oxley, drilling ban. We need medical reforms which actually cut costs. We ought to scrap the government schools system, and give parents vouchers.

    3. Rick Cox says:

      Nope! Taxes(Government) drove the companies to out sourcing to seek lower labor and production costs.
      Which Party is it that supports higher taxes and BIG Government?!!
      This and ALL Economic Catastrophies are ALL DEMOCRAT Communist!

    4. JAnson says:

      The current economic plight is not the fault of one party but rather Washington's inability to manage money or be truthful with the American people. Your diatribe is purely partisan and does nothing to help find a solution to this government created crisis. The loss of the 56,000 factories you cite is woefully inaccurate. Many factories have been priced out of the American market due to the high cost of US labor and taxes, still more have been lost due to EPA excessive regulations. These are issues that need to be addressed not shopped for scoring political points.
      America needs to be more competitive in the world market, cut the capital gains tax to zero, this will place capital in the hands of those that will create new processes, then products resulting in more jobs. Cut the corporate tax rate to match that of Ireland 12.5%. This will help the US attract new corporations and capital, we need to be business friendly.
      Corporations want US labor. Our labor is far more efficient and yields higher output than any other labor market in the world. We need ideas and leadership not partisan bickering.

      • Egberts says:

        The U.S. Business and Industry Council, which represents small- and medium-sized manufacturing companies, found that between 1997 and 2005, 110 of the 114 U.S. industries it studied had lost ground to imports in the U.S. market. That was the case even in such sectors as computers and telecommunications hardware.

        A total of 3.2 million — one in six factory jobs — have disappeared since the start of 2000. (src: Martin Crutsinger, AP Economics Writer)

        However, in response to the 56,000 factories… It is pretty darn close and nonetheless, still starkingly contrast. The correct figures is 42,000 all-sized manufacturing businesses have shuttered from 2001-2009. (BLS)

        While there is a dearth of research as to the why, we can all agree that there is a shift to a chronic underemployment. Better we nail this, the better we fare.

        I, for one, want to see a revival of small-medium manufacturing businesses started, for that industry sector posess the BEST job-force-multiplier of all industry sectors.

    5. Mike says:

      In the article: "Pictures of America's Fiscal Nightmare" there appears the following: "The Washington Post reports this morning that it’s crunch time in Washington, with legislators and the White House working to find a way to cut $2 trillion from the federal budget by 2021".

      That part, about the White House working (quote) "to find a way to cut $2 trillion from the federal budget by 2021" (or any real, substantial and pivotal cuts in runaway spending for that matter) is unfortunately rather misleading as the record already shows how the Obama White house is more actively opposed than anything else, along with their accomplices in Congress, to the number and amount of cuts necessary.

      Other than that faux pas by the Washington Post, the article is otherwise right as it basically joins in pointing out something repeatedly shown through history to today, including in Greece and increasingly also here in the U.S, and that is we must put a stop to the vote-buying, power and money-grabbing growing of government power before it is too late, or else our freedoms and resources will be gone, at which point we, the people, will all miss them, but then it will be too late.

    6. tourville says:

      Republican Policies changed our Labor Laws to enable Out Sourcing _ Off Shoring entire Manufacturing Sectors, leading to the Massive Unsolvable Unemployment Our Nation now Suffers.

      when they took hold in the decade between 2001 – 2011 , Our Nation lost an estimated 56,000 FACTORIES.

      This Economic Catastrophe is ALL REPUBLICAN.

      • Trent Anson says:

        56,000 factories in the past 10 years???? wow, someone needs to spend some time on other sites besides mmfa and the dailykos!!!

      • Steve B. says:

        Cool Aid spill on Aisle seven!

        I don't think so "tourville". Given the democrats marriage to organized labor, onerous regulation and ever increasing taxes, how can you blame the private sector for moving large portions of the manufacturing base offshore? Case in point – Boeing's current situation in South Carolina? The examples are endless…

    7. Robert says:

      The Boehner/Obama ten-year scheme is a joke. The spending cuts need to be made now! Then, only increase the debt limit by $ 300 million per vote – and only once every 90 days. Boehner and Obama want this issue to go away. Boehner wants to complain about big, bad Obama for the next year (while he does nothing to help the nation), and Obama is willing to give little johnny all the rope he needs.

      • George Colgrove, VA says:

        I agree, except we do not need to increase the debt limit. Freeze it and cut the government.

    8. janson123 says:

      The current economic plight is not the fault of one party but rather Washington's inability to manage money or be truthful with the American people. Your diatribe is purely partisan and does nothing to help find a solution to this government created crisis. The loss of the 56,000 factories you cite is woefully inaccurate. Many factories have been priced out of the American market due to the high cost of US labor and taxes, still more have been lost due to EPA excessive regulations. These are issues that need to be addressed not shopped for scoring political points.
      America needs to be more competitive in the world market, cut the capital gains tax to zero, this will place capital in the hands of those that will create new processes then products resulting in more jobs. Cut the corporate tax rate to match that of Ireland 12.5%. This will help the US attract new corporations and capital, we need to be business friendly.
      Corporations want US labor. Our labor is far more efficient and yields higher output than any other labor market in the world. We need ideas and leadership not partisan bickering.

    9. the Boodge says:

      I don't think it is just republican policies, I would say its more of the liberal democrats imposing BULLSHIT regulations and laws on US companies forcing them to move operations overseas to be able to stay competitive.

      What about obama's ban on offshore drilling on every coast, thats not a republican policy. Also, why did Brazil get billions of US dollars for their offshore drilling projects and not US companies?

    10. Paul says:

      This catastrophe may be all Republican as you say but if you breakdown the debt over the past 10 years you will see that since Obama took office, this amount of debt has skyrocketed compared to the debt from the Republicans. Both parties are to blame for this as well as congress and nothing is being done about it. That can that they kicking down the road is going to hit a wall very soon. It is time to quit pointing fingers and start forcing our members of congress to grow some balls and begin the painful deleveraging process for the debt and cut expenses without raising taxes. If they had done this back in 2008 and let the banks fail, this recovery would be actually be one instead of a fabricated one using our borrowed money and and our tax dollars.

    11. garrettc says:

      not to mention Democratic policies resulting in over regulation and huge cost to labor. We all have a part in this disaster.

    12. Independent says:

      Keep drinking that Kool-Aid and go to your happy place, tourville. Let the adults do the thinking, for apparently it is beyond you.

    13. Determined says:

      HaHa! It's good to have a sense of humor when dealing with problems caused by both parties, and a number of generations.

    14. Blair Franconia, NH says:

      Privatize the following: Social Security, Medicare, Medicaid, AMTRAK, and the TVA.

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