Is that in doubt? The Wall Street Journal reported late Sunday night that Barack Obama doesn’t think we have a spending problem, or at least that’s what John Boehner told Stephen Moore about Obama’s response to the fiscal cliff:
What stunned House Speaker John Boehner more than anything else during his prolonged closed-door budget negotiations with Barack Obama was this revelation: “At one point several weeks ago,” Mr. Boehner says, “the president said to me, ‘We don’t have a spending problem.’ ” …
The president’s insistence that Washington doesn’t have a spending problem, Mr. Boehner says, is predicated on the belief that massive federal deficits stem from what Mr. Obama called “a health-care problem.” Mr. Boehner says that after he recovered from his astonishment—”They blame all of the fiscal woes on our health-care system”—he replied: “Clearly we have a health-care problem, which is about to get worse with ObamaCare. But, Mr. President, we have a very serious spending problem.” He repeated this message so often, he says, that toward the end of the negotiations, the president became irritated and said: “I’m getting tired of hearing you say that.”
Investors Business Daily reminds the President today that math is hard, but pretty accurate … and that his own commission on deficits and debt told him the same thing:
That would be news to Obama’s debt commission, which in its final report made clear that spending is the driving force behind the nation’s debt crisis.
Here’s what the report said: “Even after the economy recovers, federal spending is projected to increase faster than revenues, so the government will have to continue borrowing money to spend.”
The panel added, “Over the long run, as the baby boomers retire and health care costs continue to grow, the situation will become far worse.”
And it recommended: “We should cut all excess spending — including defense, domestic programs, entitlement spending, and spending in the tax code.”
The commission was hardly breaking new ground here. Indeed, anyone who has looked at the federal budget can quickly see that out-of-control spending, not insufficient revenues, is the problem.
As the chart shows, even with the $620 billion in tax hikes Obama won during the fiscal cliff fight, plus the $500 billion in new ObamaCare taxes, spending will continue to outstrip revenues as far as the eye can see.
By 2022, federal revenues will top 19% of GDP, which is significantly higher than the post-World War II average. But spending will exceed 22%, and keep climbing.
Even if, as Obama apparently believes, the issue is entirely a health-care cost problem, it’s still spending. And supposedly, ObamaCare was supposed to deal with the problem. Instead, as Boehner notes in his interview, it makes the problem worse by creating even more spending on subsidies for premiums and more federal intervention in the market while aggravating the third-party-payer structure that is the fundamental problem.
The US has increased its spending from a historical level of 20% of GDP to 25% of GDP during the Obama presidency. That’s a spending problem, and that plus the massive amount of unfunded liabilities soon approaching will make the current fiscal cliff look like late payments on a Sears card. Michael Ramirez puts it into his Pulitzer-winning perspective today:
Also, be sure to check out Ramirez’ terrific collection of his works: Everyone Has the Right to My Opinion, which covers the entire breadth of Ramirez’ career, and it gives fascinating look at political history. Read my review here, and watch my interviews with Ramirez here and here. And don’t forget to check out the entire Investors.com site, which has now incorporated all of the former IBD Editorials, while individual investors still exist.