When Barack Obama starts talking like a deficit hawk … grab your wallets. According to the latest CBO analysis of the Obama administration’s budget projections, the US will add almost a trillion dollars in debt a year for the next nine years, bringing the national debt to 90% of our annual GDP. The most amazing part of this is that the new projection only exceeds Obama’s by $1.2 trillion over the same period:
President Obama’s fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation’s economic output by 2020, the Congressional Budget Office reported Thursday.
In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president’s budget would generate a combined $9.75 trillion in deficits over the next decade.
“An additional $1.2 trillion in debt dumped on [GDP] to our children makes a huge difference,” said Brian Riedl, a budget analyst at the conservative Heritage Foundation. “That represents an additional debt of $10,000 per household above and beyond the federal debt they are already carrying.”
The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it’s headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO’s deficit estimates.
In this case, a picture may be worth a thousand million billion trillion quadrillion words:
The worst deficit under a Republican Congress was $400 billion in FY2004. It’s also worth noting that the last budget produced by a Republican Congress spent $2.77 trillion (FY2007), and had a deficit of less than half of that peak. While Republican Congresses added almost $800 billion in annual spending to the budget in six years — an indefensible expansion — that pales in comparison to the $1.1 trillion added by Democratic Congresses in just three years. Under those conditions, the massive budget deficits shown in the CBO’s graph are simply unavoidable, and the best of the next ten years is double the worst of the Republican Congress from 2001-7.
Don’t expect that debt to come cheap, either. We’re already seeing signs that our interest rates will have to go up in order to sell more paper, which will cause the deficit projections here to actually fall short of reality. We could be looking at a collapse scenario where we can’t borrow enough to keep up with our interest payments by the time this decade concludes.