Gibbs on gigantic national debt: Hey, don’t forget the savings in ObamaCare
posted at 8:45 pm on November 23, 2009 by Allahpundit
Pity this poor bastard, left with no choice but to resort to just the sort of lamer-than-lame talking point that made that SNL skit over the weekend so grimly funny. Click the image and skip ahead to -2:03 for Tapper’s segment on our mind-boggling national debt, where you’ll find Gibbs enthusiastically reminding him that Reid’s health-care bill will produce a whopping $130 billion in savings over 10 years. Minor point one: As previously noted, $130 billion is less than the deficit incurred just last month. Minor point two: As hopefully everyone knows by now, the only reason Reid’s bill costs as “little” as it does is because it doesn’t go into effect until 2014. The “10-year cost” is actually the five-year cost from 2014 to 2019. A true 10-year projection would score the bill at … $1.8 trillion.
Minor point three: Our debt is now so astronomical that, by 2019, the interest on it alone will amount to $700 billion annually — the equivalent of one new TARP per year. And that’s if interest rates stay low. Perspective from the NYT:
With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.
In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan…
Even a small increase in interest rates has a big impact. An increase of one percentage point in the Treasury’s average cost of borrowing would cost American taxpayers an extra $80 billion this year — about equal to the combined budgets of the Department of Energy and the Department of Education.
But that could seem like a relatively modest pinch. Alan Levenson, chief economist at T. Rowe Price, estimated that the Treasury’s tab for debt service this year would have been $221 billion higher if it had faced the same interest rates as it did last year.
The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years.
Not enough perspective for you? Verum Serum notes that $700 billion is about the cost of the Iraq war so far. Gibbs’s take on the “savings” in the Reid bill in the context of all this is that you have to start somewhere, but we’re now dealing with such fantastic sums of money that $130 billion — even if it was an accurate figure, which it isn’t — doesn’t even qualify as a start. It’s not even 20 percent of the interest on the national debt in a single year circa 2019. And yet this is what The One’s doing with his time while America races towards an economic cliff.