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A Trillion Here, A Trillion There . . .

This week’s spending and debt news brought to mind the following quotation by the late U.S. Senator Everett Dirksen (R-Illinois), i.e., “A billion here and a billion there, and soon you’re talking about real money.”

The Wall Street Journal sub-titled an editorial this week this way:

“Even $9 trillion might be too optimistic on current spending trends.”

The newspaper described their concern this way:

“Mr. Obama's White House and the Congressional Budget Office told us that current U.S. fiscal policy is "borrow and spend" on a hyperlink. The good news is the deficit for 2009 will be "only" $1.58 trillion, about $250 billion lower than expected thanks to less need for TARP funds. But the Obama fiscal plan envisions $9 trillion in new borrowing over the next decade, which is $2 trillion more debt than the White House predicted earlier this year. The 2010 deficit also rises by about as much as the 2009 deficit falls from January, so even the TARP windfall gets spent.

“We've never fretted over budget deficits, at least if they finance tax cuts to promote growth or spending to win a war. But these deficit estimates are driven entirely by more domestic spending and already assume huge new tax increases. CBO predicts that debt held by the public as a share of GDP, which was 40.8% in 2008, will rise to 67.8% in 2019—and then keep climbing after that. CBO says this is "unsustainable," but even this forecast may be optimistic.

“Here's why. Many of the current budget assumptions are laughably implausible. Both the White House and CBO predict that Congress will hold federal spending at the rate of inflation over the next decade. This is the same Democratic Congress that awarded a 47% increase in domestic discretionary spending in 2009 when counting stimulus funds. And the appropriations bills now speeding through Congress for 2010 serve up an 8% increase in domestic spending after inflation.”

Earlier this month, Investor’s Business Daily saw some of the problem when they wrote:

“Federal tax revenues have shrunk by the largest amount since the Great Depression, according to new data. This should come as no surprise, since we've been running a Depression-era economic policy.”

Brian Riedl closes a Heritage Foundation “web memo” this week saying, “It’s time to stop digging.” His conclusion:

“The new budget spending estimates are alarming and absolutely unsustainable--and are the true cause of these appalling levels of deficit and debt. President Obama has proposed massive tax increases that still cannot keep up with the historic spending increases he has proposed. The result will be highest level of spending--and debt--in American history. Within a decade, Washington would have to spend nearly $800 billion annually just to pay the interest on the national debt.

“In this budget context, the President's and Congress's brazen proposals to create a $1 trillion health care entitlement are reckless and unaffordable. Lawmakers should focus on capping federal spending, restraining entitlements, and eliminating wasteful and lower-priority programs.”

Here’s a chart from the Wall Street Journal story that shows how debt as a percentage of GDP is expected to grow through 2019. In addition, here are links to the Congressional Budget Office Director’s blog “comparing CBO and OMB’s projections of the budget deficit” and “the budget and economic outlook.” Victor Davis Hanson seemingly hits the nail on the head on the cause of all this spending with this essay in yesterday's National Review Online. Even the Washington Post reported that the new higher estimates are likely to fuel the president's critics.

HT Mark Levin Show 

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