For those who haven’t yet seen it, here’s a link to the July 27 report by the Congressional Budget Office entitled “Federal Debt and the Risk of a Fiscal Crisis.” A few highlights from the report (and remember, the head of the CBO is a Democrat):
– U.S. federal debt is projected to rise to 62% by the end of fiscal 2010 (this October). By 2020, it could reach 90%. Even during the Civil War and World War I, it did not exceed 50%; while it was higher than that during World War II, it fell quickly once the war was over.
– If anyone thinks today’s debt will fall quickly, the report will disabuse you of that notion: “Further increases in federal debt relative to the nation’s output … almost certainly lie ahead if current policies remain in place.”
– As to what the CBO means by fiscal crisis, it’s the point when “investors would lose confidence in the government’s ability to manage its budget, and the government would thereby lose its ability to borrow at affordable rates.”
The CBO notes that the crisis began before Obama took office, but that the policies he is pursuing will have a catastrophic negative impact on the previous trend.
As Becky DeWind, a Michigan businesswoman who received stimulus funds, put it in advance of an Obama trip to her state: “I wish he’d save his money and not come to Western Michigan … They were just swiping a Chinese charge card for it anyway, and my kid’s got to pick up the tab.”
Have PoliticalMavens.com delivered to your inbox in a daily digest by clicking here