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Can U.S. survive Obama's Doubledown Day?
Posted By Lord Monckton On 11/20/2012 @ 8:06 pm In Commentary,Opinion | No Comments
Could Barack Obama achieve that rare feat as president – doubling the national debt during his term of office? And can the nation survive Obama’s Doubledown Day?
According to the Treasury, the national debt on Inauguration Day, Jan. 20, 2009, was $10,626,877,048,913.08. Yesterday it was up by 54 percent at $16,281,329,916,599.63. And counting.
That is 105 percent of the value of everything the U.S. makes and sells in an entire year. For comparison, the European Union’s anti-bankruptcy treaty says no member state may borrow more than 3 percent of GDP in a year or 60 percent in total.
If 16.3 trillion dollar bills 6.1 inches long were laid end to end, they would stretch all the way to the sun and back well over eight times, or to the moon and back almost 3,300 times.
If Obama continues to borrow at the current rate, his Doubledown Day will occur well before he leaves the White House. The comparatively insignificant spending cuts and tax hikes of the absurdly named “fiscal cliff” would not change the numbers much.
On Obama’s Doubledown Day, Uncle Sam’s debt will be $21,253,754,097,826.16.
Debt interest alone is running at $270 billion a year, around three times the entire education budget and close to $2,500 for each U.S. taxpayer. Outstanding debt itself is already $140,000 per taxpayer and will be heading for $200,000 per taxpayer on Doubledown Day.
And how have the “Democrats” been dealing with this crisis? They have been dealing with it. Oh yes, indeedy. They have been dealing with it most decisively and firmly – by fiddling the numbers.
Last year the dreadful Nancy Pelosi published a chart that went viral on the sinistrosphere, apparently showing that Obama was borrowing less than the previous four presidents. However, after critics pointed out that Pelosi had deducted a whole year from Obama’s term of office and added it to his predecessor’s, the bogus graph was hastily amended.
Even then it was defective. Here is what PolitiFact had to say about it:
“It made a major calculation error that dramatically skewed the debt increase away from Obama and toward George W. Bush. It glossed over significant variations in time served in office. It cherry-picked the measurement that was favourable to its cause.
“And it is contradicted by statistics for GDP-adjusted debt, which show Obama to be the most, rather than the least, debt-creating president of the last five. … This chart is a failure. We rate it Pants-On-Fire.”
The biggest hike in national debt in history came when Roosevelt tried and failed to buy America’s way out of the Great Depression with the “New Deal.” Result: Debt topped out at 120 percent of GDP, and the U.S. took a whole decade longer than Europe to come out of recession.
Not that Republicans have much to crow about. Under Reagan, debt rose by 30 percent of GDP, from 33 to 63 percent.
But Obama is setting records. Under his presidency, in less than half Reagan’s time, the national debt has already risen by 31 percent of GDP, from 74 to 105 percent.
Obama is accumulating debt at a rate faster than any post-war president. He is the first such president to allow debt to rise above 100 percent of GDP. By Doubledown Day, he will preside over what, in absolute terms, will be the greatest national debt in world history.
Unfortunately, the problem does not end there. By 2020, interest alone on the national debt is expected to top $1 trillion a year. Interest alone amounts to $1 per hour, every hour of every day of the year, for every U.S. taxpayer. Federal debt interest will then be the biggest line item in the budget – bigger even than Medicare, Medicaid, or defense.
Handouts to federal pensioners, the sick, the unemployed, food-stamps claimants, rent-seekers in the auto and banking industries, global warming profiteers – under Obama the list of federally funded scroungers has grown beyond all reason.
But the most serious problem in getting the debt under control is what accountants call the “contingent liabilities.” As though today’s huge handouts were not enough, self-serving politicians have made staggering commitments to make still larger handouts in future.
Can the U.S. survive the fiscal collapse that leads to Doubledown Day? Yes, but only with difficulty. Reagan’s mistake was in misunderstanding supply-side economics. True, cutting taxes leads to economic growth, but one must cut federal spending before cutting the taxes.
Obama has learned nothing from history. His mistake (charitably assuming that it is not deliberate) is that of Keynes and Roosevelt. A nation cannot borrow and spend its way out of recession. And it ought to be self-evident even to the “Democrats” that the solution to too much borrowing yesterday is not record borrowing and spending today.
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