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The Big Fail: Obama Steers America Towards Disaster

- May 15, 2012

Obama’s Failure To Lead Will Leave Americans Saddled With A Massive Debt, Broken Entitlement System, And Wounded Economy

THE OBAMA ADMINISTRATION ADMITS THEY DON’T HAVE A PLAN TO PAY FOR THEIR LIBERAL POLICIES

This Chart From Obama’s Budget Shows The President’s Plan To Let Our Debt Skyrocket

Click To View

Source: Budget Of The United States Government, Fiscal Year 2013, Office Of Management And Budget, 2/13/12

Treasury Secretary Timothy Geithner Admitted The Administration Doesn’t Have A Plan To Fix The Explosion Of Federal Debt Looming In Our Future. REP. PAUL RYAN: “Because we got 10,000 people retiring every day, and healthcare costs going up…” TREASURY SECRETARY TIMOTHY GEITHNER: “That’s right. We have millions of Americans retiring every day, and that will drive substantially the rate of growth of healthcare costs. You are right to say we’re not coming before you today to say we have a definitive solution to that long-term problem. What we do know is, we don’t like yours.” (Committee On The Budget, U.S. House Of Representatives, 2/16/12)

Future Generations Face A Diminished Future Due To Obama’s Lack Of Leadership

Since Obama Took Office, The National Debt Has Increased By Over $5.0 Trillion, An Increase Of 47.5 Percent. (U.S. Treasury Department, Accessed 5/13/12)

By 2016, Social Security’s Disability Trust Fund Will Run Out Of Money. “New projections in March gave a more dire assessment of the disability program, which has seen a spike in applications as more disabled workers lose jobs and apply for benefits. The nonpartisan Congressional Budget Office said the disability fund would run out of money in 2016. Social Security’s trustees are again urging Congress to shore up the disability system by reallocating money from the retirement program, just as lawmakers did in 1994.” (Stephen Ohlemacher, “Poor Economy Worsens Social Security’s Finances,” The Associated Press, 4/23/12)

By 2022, Obama’s Budget Would Increase The Total Federal Debt To $25.9 Trillion. (“Budget Of The United States Government, Fiscal Year 2013,” Office Of Management And Budget, 2/13/12)

  • Former U.S. Comptroller David Walker: “In The Year 2022 More Than 78 Percent Of Total Outlays (Spending) Will Be On Autopilot - Which Is Both Irresponsible And Unsustainable.” “Former Comptroller General David Walker, appointed by President Bill Clinton as the nation's chief auditor, sharply criticized Obama's budget. ‘The proposed budget would greatly increase the portion of government spending that is on 'autopilot.' While the president's budget cuts discretionary spending programs by 1 percent over a 10-year period, mandatory spending programs and interest on debt grow by more than 96 percent over the same decade,’ Walker said. ‘The result is that in the year 2022 more than 78 percent of total outlays (spending) will be on autopilot - which is both irresponsible and unsustainable.’” (Kevin Hall, “Obama’s Budget Would Shrink Annual Deficits, But National Debt Still Explodes,” McClatchy Newspapers, 2/13/12)

By 2024, Medicare’s Trust Fund Will Be Exhausted. “The Medicare fund for seniors' health care is scheduled to run dry in 2024, which is unchanged from last year, largely because of a 2 percentage point cut enacted by Congress last year.” (David Jackson, “Social Security Financial Lifespan Shortened Three Years,” USA Today, 4/23/12)

  • Bringing The Current Medicare System Into Balance Will Require A 47 Percent Increase In Medicare Taxes Or A 26 Percent Cut In Expenditures. “Lawmakers could address the long-range financial imbalance in several different ways. In theory, they could immediately increase the standard 2.90-percent payroll tax by the amount of the actuarial deficit to 4.25 percent, or they could reduce expenditures by a corresponding amount. Note, however, that these changes would require an immediate 47-percent increase in the standard tax rate or an immediate 26-percent reduction in expenditures.” (The Board Of Trustees, Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds, “2012 Annual Report Of The Boards Of Trustees Of The Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds,” 4/23/12)

By 2033, Social Security Is Predicted To “Run Dry”, Three Years Earlier Than Last Year’s Projection. “The trustees who oversee Social Security say the program’s trust funds will now run dry in 2033. Medicare’s finances have stabilized but the program’s hospital insurance fund is still projected to run out of money in 2024.” (Stephen Ohlemacher, “Poor Economy Worsens Social Security’s Finances,” The Associated Press, 4/23/12)

  • Social Security Benefits Will Be Cut By 23 Percent When The Trust Fund Is Exhausted. “The most recent Social Security trustees report says that, under intermediate assumptions, the Social Security trust fund will be exhausted in 2033, which would result in a 23 percent reduction in benefits if Congress and future administrations do not deal with the shortfall. This is three years earlier than last year's report.” (Glenn Kessler, “Obama’s ‘Life Of Julia:’ Misleading On Social Security,” The Washington Post, 5/7/12)

By 2035, The Size Of Our Debt Will Reduce Our Gross National Product By 18 Percent, $11,300 Per Person. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)

  • By 2035, Nine Percent Of GDP Would Be Spent Just Paying The Interest On Our Debt. “Under the alternative fiscal scenario, interest spending would grow much faster—to 9 percent of GDP by 2035 and much more in later years—because of ballooning debt. Moreover, those projections do not incorporate the effects of rising debt on interest rates; as discussed in Chapter 2, higher federal debt would lead to higher interest rates, making interest outlays even larger, particularly under the alternative fiscal scenario.” (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)

By 2037, Our National Debt Will Grow To Twice The Size Of The Economy. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)

By 2060, The Federal Government’s Spending Would Have To Reach 50 Percent Of GDP In Order To Pay For Our Broken Entitlement System. (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)

OBAMA’S FAILURE TO ACT INCREASES THE CHANCES OF A “SUDDEN FISCAL CRISIS”

The Total Federal Debt Is Now 101 Percent Of GDP. (Department Of The Treasury, “Debt To The Penny And Who Holds It,” Treasury Direct, Accessed 5/14/12; Bureau Of Economic Analysis, Accessed 5/14/12)

Congressional Budget Office: “Recently, The Federal Government Has Been Recording Budget Deficits That Are The Largest As A Share Of The Economy Since 1945.” (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)

  • CBO: “[L]arge Budget Deficits And Growing Debt Would Reduce National Saving, Leading To Higher Interest Rates, More Borrowing From Abroad, And Less Domestic Investment …” “In particular, large budget deficits and growing debt would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment—which in turn would lower income growth in the United States.” (“CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office, 6/22/11)
  • CBO Director Douglas Elmendorf: Growing Debt Increases Risk Of “Sudden Fiscal Crisis.” “Growing debt also would increase the probability of a sudden fiscal crisis, during which 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.” (Douglas Elmendorf, “CBO’s 2011 Long-Term Budget Outlook,” Congressional Budget Office “Director’s Blog”, 6/22/11)
     
  • Economists Carmen Reinhart And Kenneth Rogoff Found Debt In Excess Of 90 Percent Of GDP Can Cut Growth Rates In Half. “When gross external debt reaches 60 percent of GDP, annual growth declines by about two percent; for levels of external debt in excess of 90 percent of GDP, growth rates are roughly cut in half.” (Carmen M. Reinhart and Kenneth S. Rogoff, “Growth In A Time Of Debt,” American Economic Review, May 2010)

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