United Liberty

The Treasury has released the 2009 Financial Report Of The U.S. Government, which is full of facts, charts and figures on the fiscal health of the country. Let me tell you, if you even have the slightest understand of basic economics, this report should trouble you.

I’ve pulled a couple of the charts to give you an idea of how screwed we really are. Let me be clear in saying that I am not blaming this on the current administration. They are, however, doing nothing to deal with the problem. In fact, they are doing what previous administrations have done…building on past fiscal irresponsibility with more fiscal irresponsibility.

This first graph shows that without major policy changes, debt as a percentage of gross domestic product (GDP) will exceed 200% in the next 35 years. It gets even worse as you can see below. Part of the reason is demonstrated in the next chart.

As you can see here (click to enlarge for better detail), interest on the national debt becomes more of a problem than entitlements, which is what many fiscal conservatives often talk about. This is a financial burden that cannot be solved by simply raising taxes, because with that economic growth is put at risk.

Over the last few decades, annual government spending as a percentage of GDP has been around 20%. However, In the next 20 years, spending as a percentage of GDP will hit 30% and it will just continue to grow.

Here is a look, thanks to Matt Welch over at Reason, at government spending over the long-term. The standard of government spending, until the last couple years, has been 20% of gross domestic product (GDP).

Thanks to booming entitlement spending, specifically in Medicare and Medicaid, the future does not look bright for taxpayers.

Over at Reason, Peter Suderman hammers Republicans for pandering on Medicare during the health care “reform” debate:

Congressman Paul Ryan’s Roadmap for America’s Future—his sweeping entitlement and budget proposal—would cut Medicare. It would cut Medicare by a lot—more, as Paul Krugman notes, than even ObamaCare would cut it. Indeed, that’s exactly the point, and the virtue of the proposal: In its current form, Medicare is unsustainable. Unlike ObamaCare, Ryan’s proposal would fix that. And unlike ObamaCare, it would not plow funds generated from those cuts back into propping-up and expanding a failing, third-party-payer, employer-provided insurance system that pretty much everyone dislikes. But yes, it would cut Medicare significantly.

That’s a good thing, except that the Republican party is going to have a tough time fully embracing it. The problem is that by using opposition to Medicare cuts to build opposition to ObamaCare, the GOP has rendered itself unale to seriously deal with the program’s long-term problems.

I know what you’re thinking: man that Pete is a positive guy. I like to describe myself as realistic, with a bit of fatalism throw in. Either way, I find it hard to look at the economic landscape and have any hope. It is especially dreadful when politicians have to get re-
elected, AND said politicians consult certain “economists”.

Economists have for years looked at what is happening in a society and sought to come up with solutions as to how an economic crisis can be “fixed”. The problem is, like in all fields, you have good economists, and you have the not so good (The latter seem to be the ones that always find their way onto the public payroll).

In extremely broad terms economists can be split into two categories:

If you are a student of American history your eyes should be opening as to which economist is most often chosen by our elected officials. The real question is “why”?

Well, why wouldn’t a politician pick economist #2?

What will they think of next? Our nation is in the midst of a national recession not seen since the Great Depression. Tax revenues are in decline. Every agency in Alabama is in proration. Yet as many as 560,000+ households in Alabama are about to qualify for free cell phones (more than 25% of the state!).

Read the article here.

I don’t care what anybody says; if we live in a country where the “poor” get free cell phones, we have no real poor here.

Notice that this program only gives recipients about an hour of talk-time per month—but allows them to buy additional time for 20 cents a minute (and most do). If these people are supposed to be poor, how are they able to afford to pay for this extra time?

*Update- We can now include links to Dr. Paul’s full statement to the press and the policies about which Ron and the four third-party candidates all agree.  Once video becomes available, we’lll add that as well.