Increasing federal debt will be a growing burden on government action, crowding out lawmakers ability to adopt tax and spending priorities in good times and reducing flexibility during recessions, all while making a fiscal crisis more likely and hindering long-term growth, the nonpartisan Congressional Budget Office said Wednesday.
In the annual Long-Term Budget Outlook, the legislatures budget scorekeepers said that the ratio of debt to GDP this year will be 69 percent, 7 percentage points higher than last year. In 2021, the CBO predicts debt will reach 76 percent of GDP, but under a more direand more likelyscenario, the public debt will be 101 percent of GDP 10 years from now, well into the economic danger zone of 90 percent or more.
Last year, that worst-case scenario predicted a debt-to-GDP ratio of 87 percent in 2020, demonstrating that the public debt picture has worsened considerably, in part due to a bipartisan tax deal last year that reduced expected revenue.
While much of the debt is driven by the recessions drop in tax revenues and government actions taken in response to the economic calamity, CBO highlighted the structural deficit that existed before 2007 and cites growing health care costs and the aging population as a major driver of government spending; federal health spending is set to grow from less than 6 percent of GDP today to more than 9 percent in 2035.
The CBO says that allowing the 2010 tax deal that extended Bush administration tax policies to expire as planned would be helpful in keeping government sustainable, noting that significant increase in revenues and decrease in the relative magnitude of other spending would offset muchthough not allof the rise in spending on health care programs and Social Security.
However, the CBO's more likely scenario assumes that the tax deal is extended, that the alternative minimum tax would continue to be restricted, and that the doc fix, Congresss annual decision to ease limits on Medicare physician pay, will occur as expected. Under this scenario, debt would rise to 187 percent of the economy in 2035.
While CBO does not provide policy recommendations, it urged policymakers to take significant action to reduce the deficit and debt by reducing spending, increasing taxes, or some combination of the two. While those changes will slow economic recovery, the agency warns, the sooner they are made, the more gradual they can be, easing the transition into new policies but likely requiring sacrifices from older Americans.
The 2011 Long-Term Budget Outlook, released Wednesday morning, reports that the the combination of automatic budgetary responses and Obamas stimulus had a profound impact on the federal budget. According to CBO projections, before Obamas stimulus became law, federal debt equaled 36 percent of GDP and was projected to decline slightly over the next few years. Instead, thanks in large part to the stimulus, debt reached 62 percent of GDP by 2010.
PricewaterhouseCoopers, a professional services firm created in a merger that destroyed several spaces and capital letters, has just issued their forecast for the future of America under ObamaCare. The Heritage Foundation provides a summary of the results. It's not pretty.
The important thing to remember about ObamaCare is that the past two years have been its salad days. The really hideous damage is still on the way. Thousands of jobs destroyed, health care costs rising, rampant corruption through the waiver program... and it's just getting warmed up. This baby hasn't even popped out of first gear yet.
What does PricewaterhouseCoopers see ahead for us? Health care costs continue to rise at an accelerating pace, from a 7.5% increase in 2010 to 8.5% in 2012. As Heritage's Margot Crouch notes, this is the exact opposite of the promises made by President Obama.
But wait, that's not all! "Even steeper rises in the cost of private insurance are possible, due to ObamaCare's reductions in Medicare payment rates and its expansion of the Medicaid program," warns Crouch. That's because private parties have to make up the difference when those programs pay less.
The chief actuary of Medicare thinks "15 percent of hospitals, skilled nursing facilities, and home health agencies" will become unprofitable by 2019. What happens to unprofitable businesses again? I mean, after all the bailouts have been exhausted? What will the health care industry look like in eight years, when at least fifteen percent of the providers are gone?
The really awful news is PWC's projection of employer reaction to ObamaCare's crushing mandates. Their survey shows "nearly half of employers will drop their coverage, dumping employees into the government-run exchanges." Also, "four out of five employers will make changes to help cover new costs under ObamaCare, including raising premiums, deductibles, and co-payments."
So much for "if you like your plan, you can keep your plan." The tidal wave of people slamming into the federal exchanges will become a nuclear deficit explosion. We'll all be able to look back at the charlatans who claimed ObamaCare would be deficit-neutral, and the simpletons who believed them, and laugh through our tears. If the Union hasn't completely come apart by 2014. At the rate things are going and if 2012 elections doesn't help, I can see some states saying FU and heading off again.
#1
Darth you left off the best paragraph or maybe you don't like to say, 'we told you so'.
The negative consequences of ObamaCares changes will be threefold: higher costs for those with employer-sponsored coverage; a greater debt burden on current and future taxpayers; and slower growth in job creation and the overall economy, Crouch concludes. In other words, precisely the things ObamaCare critics said would happen. ObamaCare critics will go down in history as the most thoroughly vindicated group to ever pick up a keyboard.
#2
I was hoping people would click through. I think the bloggers that helped make the new media will be seen as important to the upcoming conflict as Thomas Paine was.
#3
On the other hand:
20 June 2011,Chicago -- Delegates to the American Medical Association Annual Meeting voted on June 20 by a 2-1 ratio to reaffirm the AMA's support for "individual responsibility" to purchase health insurance, with tax credits and subsidies for those who cannot afford insurance.
The Association's House of Delegates rejected proposals to rescind the AMA's support for an individual mandate, which takes effect in 2014 as part of the Patient Protection and Affordable Care Act.
Physicians who oppose the health reform law tried to convince colleagues that the AMA should change its position. Delegates from some state medical societies have blamed the Association's support for an individual mandate for a loss of membership in the AMA in their states.
AMA President Cecil B. Wilson, MD, said the AMA lost 1% to 2% more members in the last year than the previous year. ...
Roskam: In fact, Medicare as we know it will end in 2024, absent some change in policy, or some change in moving forward. That's right, isn't it?
Blahous: Yes. Video at link. And yet the dhimocrats continue to say everything is aok. Always humorous: the Democrats say that it's the Republicans who want to end Medicare, yet their own (in)action guarantees that Medicare will go under. Of course, should the Democrats regain control of the Congress their 'fix' will be to jack Medicare taxes. They'll do it at the same time they jack Obamacare taxes. Count on it.
#1
Medical care, whether Medicare, Medicaid, insurance, or cash, is flat-out unsustainable on its current path. Everyone cannot have everything, and still leave funds (and motive) for further advances. We have to make choices - but by we I mean individuals, not government or insurance bureaucrats. When I pay by cash I already make value judgements - and it does bother me that others feel it is perfectly fine to take my money (by taxes) so they don't have to make the same choices.
#4
#2 I guess it depends on your definition preferable. A two year for a knee replacement followed by a 6 month wait to get you off the opiates isn't my definition of 'better off'.
My Administration is committed to creating an unprecedented level of openness in Government. We will work together to ensure the public trust and establish a system of transparency, public participation, and collaboration. Openness will strengthen our democracy and promote efficiency and effectiveness in Government.
Here's an example of Obama's "unprecedented level of openness in Government."
Darrell Issa, chairman of the House Oversight and Government Reform Committee, holds one of many redacted documents submitted by DOJ in response to the committee's subpoenas about Fast & Furious.
Watch the 7 minute video of Issa repeatedly asking Weich, who's the highest level person who authorized Fast & Furious, while Weich keeps repeating a dodge about the inspector general looking into it. Ouch... A blacked out piece of paper is not very transparent. Or was that another campaign lie, Bambie?
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
Increasing federal debt will be a growing burden on government action, crowding out lawmakers ability to adopt tax and spending priorities in good times and reducing flexibility during recessions, all while making a fiscal crisis more likely and hindering long-term growth, the nonpartisan Congressional Budget Office said Wednesday.
PricewaterhouseCoopers, a professional services firm created in a merger that destroyed several spaces and capital letters, has just issued their forecast for the future of America under ObamaCare. The Heritage Foundation provides a summary of the results. It's not pretty. 
Roskam: In fact, Medicare as we know it will end in 2024, absent some change in policy, or some change in moving forward. That's right, isn't it?
From the White House web site:
